[Senate Hearing 114-419]
[From the U.S. Government Publishing Office]









                                                        S. Hrg. 114-419

EXAMINING FEDERAL IMPROPER PAYMENTS AND ERRORS IN THE DEATH MASTER FILE

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS


                             FIRST SESSION

                               __________

                             MARCH 16, 2015

                               __________

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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin Chairman
JOHN McCAIN, Arizona                 THOMAS R. CARPER, Delaware
ROB PORTMAN, Ohio                    CLAIRE McCASKILL, Missouri
RAND PAUL, Kentucky                  JON TESTER, Montana
JAMES LANKFORD, Oklahoma             TAMMY BALDWIN, Wisconsin
MICHAEL B. ENZI, Wyoming             HEIDI HEITKAMP, North Dakota
KELLY AYOTTE, New Hampshire          CORY A. BOOKER, New Jersey
JONI ERNST, Iowa                     GARY C. PETERS, Michigan
BEN SASSE, Nebraska

                    Keith B. Ashdown, Staff Director
       Patrick J. Bailey, Chief Counsel for Governmental Affairs
              Gabrielle A. Batkin. Minority Staff Director
           John P. Kilvington, Minority Deputy Staff Director
         Peter Tyler, Minority Senior Professional Staff Member
                     Laura W. Kilbride, Chief Clerk
                   Lauren M. Corcoran, Hearing Clerk
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Johnson..............................................     1
    Senator Carper...............................................     2
    Senator Lankford.............................................    24
    Senator Peters...............................................    27
    Senator McCaskill............................................    29
    Senator Ayotte...............................................    32
    Senator Ernst................................................    34
Prepared statements:
    Senator Johnson..............................................    43
    Senator Carper...............................................    45

                               WITNESSES
                         Monday, March 16, 2015

Judy C. Rivers, Logan, Alabama...................................     4
Sean Brune, Senior Advisor to the Deputy Commissioner, Office of 
  the Budget, Finance, Quality and Management, U.S. Social 
  Security Administration........................................    11
Hon. Patrick P. O'Carroll, Jr., Inspector General, Social 
  Security Administration........................................    13
Hon. David Mader, U.S. Controller, Office of Management and 
  Budget.........................................................    15
Beryl H. Davis, Director, Financial Management and Assurance, 
  U.S. Government Accountability Office; Accompanied by Daniel 
  Bertoni, Director, Education, Workforce and Income Security, 
  U.S. Government Accountability Office..........................    17

                     Alphabetical List of Witnesses

Bertoni, Daniel:
    Testimony....................................................    17
    Joint prepared statement.....................................    80
Brune, Sean:
    Testimony....................................................    11
    Prepared statement...........................................    61
Davis, Beryl H.:
    Testimony....................................................    17
    Joint prepared statement.....................................    80
Mader, Hon. David:
    Testimony....................................................    15
    Prepared statement...........................................    74
O'Carroll, Hon. Patrick P.:
    Testimony....................................................    13
    Prepared statement...........................................    68
Rivers, Judy C.:
    Testimony....................................................     4
    Prepared statement...........................................    47

                                APPENDIX

Chart submitted by Senator Johnson...............................   100
Information submitted by Mr. Brune...............................   101
Information submitted by Mr. Brune...............................   102
Statement submitted by the National Association for Public Health 
  Statistics and Information Systems.............................   103
 
EXAMINING FEDERAL IMPROPER PAYMENTS AND ERRORS IN THE DEATH MASTER FILE

                              ----------                              


                         MONDAY, MARCH 16, 2015

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 4:03 p.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Ron Johnson, 
Chairman of the Committee, presiding.
    Present: Senators Johnson, Lankford, Ayotte, Ernst, Carper, 
McCaskill, and Peters.

             OPENING STATEMENT OF CHAIRMAN JOHNSON

    Chairman Johnson. This hearing will come to order.
    First of all, I want to welcome all of our witnesses here. 
I appreciate your thoughtful testimony. The hearing's title is 
``Examining Federal Improper Payments and Errors in the Death 
Master File.'' And, in particular, we have a very interesting 
witness who has certainly been the victim of inaccuracies in 
our Death Master File (DMF): Ms. Judy Rivers from Logan, 
Alabama. And, Ms. Rivers, I have to say that when I read your 
testimony--and I would really recommend everybody reading the 
full testimony. It is quite the story. But I was struck by very 
early on you made the statement, ``It has often been said that 
Washington, D.C., is the capital of unintended consequences.'' 
And we are going to be seeing that here today.
    But what I would like to say is that we are going to start 
off with Ms. Rivers testifying, and then I am going to offer 
every Senator a chance to ask one question, no statements, 
because then we have to move on with the rest of the panel. We 
are somewhat time-constrained. But we really want to hear Ms. 
Rivers' story. It is a powerful testament of unintended 
consequences.
    But I have a written opening statement which I will enter 
into the record,\1\ without objection.
---------------------------------------------------------------------------
    \1\ The prepared statement of Chairman Johnson appears in the 
Appendix on page 43.
---------------------------------------------------------------------------
    And what I would really like to do is turn it over to our 
Ranking Member, Senator Tom Carper, who has really done yeoman 
work on this particular issue for--I will not say how many 
years, but you have certainly been dedicated to trying to 
correct the problem of improper payments in the Federal 
Government. So I think you probably have a few words to say, 
and I will turn it over to you.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Thank you very much, Mr. Chairman. Thanks 
for pulling this together. And thanks to our witnesses for 
joining us today.
    As some of you know, the work that I have done on improper 
payments for the last decade or so, I have done with Tom 
Coburn, whose birthday was just this weekend. He is retired, 
and I know he is here in spirit with us today because he cares 
a lot about all the money that we are leaving on the table.
    Remember the story about Willie Sutton? They used to say to 
Willie Sutton, ``Why do you rob banks?'' He said, ``That is 
where the money is.'' Why do we go after improper payments? 
That is where the money is, and there is a whole ton of it, as 
we know.
    While our fiscal situation is improving, we still have a 
big budget deficit. It is about one-third of what it was maybe 
5, 6 years ago, but it is still too much. We have a debt of 
about $18 trillion. At a time when many agencies are struggling 
with tight budgets and facing sequestration on the horizon, we 
just cannot afford to be making $125 billion in improper 
payments like we apparently made last fiscal year (FY).
    This latest improper estimate represents an almost $19 
billion increase over the previous year. After the level of 
improper payments went down for a number of years, we saw an 
increase of $19 billion. These payments come from over 70 
programs at more than 20 agencies in programs ranging from 
Medicare and Medicaid to the Department of Defense (DOD). And 
if we are going to get a better handle on our debt and our 
deficit--and, frankly, improve Americans' impression of how we 
take care of their money--we need to sharpen our pencils and 
need to stop making the kind of expensive, avoidable mistakes 
that lead to wasteful spending, and make our agencies and 
programs vulnerable to fraud and abuse.
    Congress has already taken some steps that are helping 
agencies to address this challenge. Our improper payments 
problems were first addressed through legislation that 
originated in the House in 2002. The Improper Payments 
Information Act required agencies to estimate the levels of 
improper payments made each year.
    In 2010, Dr. Coburn and I followed up on this effort with 
the Improper Payments Elimination and Recovery Act (IPERA), 
which expanded the requirements for agencies to identify, 
prevent and recover improper payments. In 2012, Senators Susan 
Collins, Scott Brown, and I went further with the Improper 
Payments Elimination and Recovery Improvement Act. Building off 
a very good initiative of the Administration, the law made 
permanent the ``Do Not Pay'' program, which is designed to 
screen all Federal payments in order to double check basic 
eligibility requirements. Simply put, ``Do Not Pay'' allows a 
government agency to check whether someone should be paid 
before the government pays them. I think that is common sense. 
I hope to have a discussion with our witnesses from the Office 
of Management and Budget (OMB) and the Government 
Accountability Office (GAO)--about how all of these legislative 
initiatives are working, or are not working, and what 
additional measures we should consider.
    We will also spend some time today discussing the specific 
problems of agencies making payments to people who are actually 
deceased. For example, the Office of Personnel Management (OPM) 
Inspector General (IG) reported just 4 years ago that some $600 
million in improper payments were made to Federal retirees 
found to have died over the previous 5 years. However, such 
payments to dead people are not unique to this one program, and 
improving the collection, verification, and the use by Federal 
agencies of data on individuals who have died will help curb 
hundreds of millions, maybe billions of dollars in improper 
payments.
    I am actively working with Chairman Johnson, with the 
Administration, and with our colleagues here on this Committee 
to reintroduce legislation from the last congressional session 
to tackle the very frustrating problem of improper payments to 
dead people. Unfortunately, we have more work ahead.
    Last week, the Social Security Inspector General released a 
report stating that 6.5 million people have active Social 
Security numbers (SSN) who, based on the Social Security 
Administration's (SSAs) own records, would be more than 112 
years old. I think maybe in our country we have had just a 
handful of people actually live that long. Now we are told 
there could be 6.5 million? I am not sure where they are, or if 
they are out there. Maybe not.
    In fact, a few thousand of the records reviewed by the 
Inspector General seem to show ``living'' individuals with 
active Social Security numbers who were born before the Civil 
War. In the real world, public records show that only 35 people 
worldwide are 112 or older.
    We will hear today from the Social Security Administration 
about their efforts to ensure accurate information about who is 
alive or dead. However, what should be extremely concerning to 
us is that inaccurate death data may lead to improper payments 
by many other agencies across the government and also creates 
greater vulnerability for fraud and identity theft. We will 
hear more about this problem and the opportunities for a 
solution from today's witnesses.
    I want to make clear my view that the Administration 
deserves a lot of credit for many initiatives to curb waste and 
fraud, as Controller David Mader of the Office of Management 
and Budget will soon describe. But we need to do more, and we 
have to use every tool available to put our fiscal house back 
in order and give the American people the government that they 
expect and deserve.
    It is the right thing to do on behalf of the taxpayers of 
our country who entrust us with their hard-earned money. I 
often think of how the Preamble to the Constitution speaks of 
``a more perfect union.'' We will never be perfect in this 
area, maybe in any area, but we should strive for perfection 
because everything we do we know we can do better.
    So in that spirit, I look forward to working with the 
Administration, with our Chairman, and with our colleagues on 
this Committee and outside this Committee to make real progress 
this year on reducing improper payments.
    Thank you so much.
    Chairman Johnson. Thank you, Senator Carper.
    It is the tradition of this Committee that we swear in 
witnesses, so if you would all stand and raise your right hand. 
Do you swear that the testimony you will give before this 
Committee will be the truth, the whole truth, and nothing but 
the truth, so help you, God?
    Ms. Rivers. I do.
    Mr. Brune. I do.
    Mr. O'Carroll. I do.
    Mr. Mader. I do.
    Ms. Davis. I do.
    Mr. Bertoni. I do.
    Chairman Johnson. Thank you.
    Our first witness this afternoon will be Ms. Judy Rivers. 
She is a private citizen from Logan, Alabama. She has twice 
been mistakenly listed as deceased by the Federal Government. 
Today she will tell her story of the financial impact errors in 
the Death Master File have on innocent taxpayers.
    And, Ms. Rivers, I just have to again commend you for being 
willing to go public with certainly your trials and 
tribulations, and hopefully your story can help prevent this 
from happening to other Americans. So we look forward to your 
testimony.

         TESTIMONY OF JUDY C. RIVERS,\1\ LOGAN, ALABAMA

    Ms. Rivers. Thank you very much.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Rivers appears in the Appendix on 
page 47.
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    First of all, good afternoon, Chairman Johnson, Ranking 
Member Carper, and distinguished Members of this Committee. 
Thank you for inviting me to speak about my experiences with 
the Death Master File.
    My name is Judy Rivers, and I have twice been listed on the 
Death Master File. The first incidence occurred in 2001, and it 
was actually fairly painless because, first of all, I had no 
idea that it actually happened. I had a couple of identity 
theft situations. Someone forced some money through my bank, 
but I had never heard of the Death Master File. And we got 
those cleared up, and I just continued on.
    The second occurrence happened during one of the worst 
periods of my life. I had just spent 17 months taking care of 
two terminally ill parents, and I think I was probably at one 
of the lowest points of my life at that time. So this situation 
did not help anything.
    I could never have imagined I would reach the point of 
hopelessness, homelessness, financial destitution, loss of 
reputation and credibility, unable to find a job, an apartment, 
a student loan, or even buy a cell phone. Without a Social 
Security number, you can do nothing in the United States.
    Suspected as an identity thief became a way of life for me. 
During the last 5 years, every H.R. person I have interviewed 
with, police who have pulled me over for perhaps going a little 
too fast, the first thing they do is go through your records, 
put you through a file, and when you come up as deceased or 
that the insurance--they actually do not know if it belongs to 
you or not--then a lot of questions start, and it becomes 
extremely uncomfortable.
    I would like to make it clear that all of the problems I 
have had during the past 5 years are not only a direct result 
of the Death Master File. However, the Death Master File has 
been like a propagating hydra underneath all of my problems. So 
every single problem that I had, the Death Master File and the 
fact that I did not have an identity made everything worse.
    It started when I was providing full-time care to my 
parents, as I said. When my parents passed away, their home was 
sold, and I had to relocate very quickly. In my entire life, 
since the age of 17, I have supported myself, put myself 
through school. I have never not had a job, not worked, owned 
my own firm for 30-something years, and really have been very 
blessed in that area. So when I start looking for a job and an 
apartment and I am not able to get one, it is like, ``Wait a 
minute, what is going on here? ''
    Everywhere I searched, everywhere I applied, I was turned 
down. Finally, I had to leave my parents' home quickly, so I 
contacted an old friend and asked if I could borrow a spare 
room for a few weeks. That few weeks turned into 3 months. 
Unfortunately, his landlord asked me to leave at that point 
because I was not on the lease.
    So I again went apartment searching. Again, the question of 
my validity, my credibility, and because my Social Security 
number did not check out, I was unable to find an apartment 
anywhere.
    After searching for a period of 3 weeks and with no choice 
and something that I thought really only happened on 
television, I had to move into my car. I did some research on 
the Internet, got some basic information on how to do that, and 
the best places to park, such as a truck stop for protection. 
So my two puppies and I lived in my car for 3\1/2\ months. 
During that entire time, I was constantly searching for a room, 
for an apartment. I kept going out further in the areas of 
Alabama, such as Logan, in order to find someone that probably 
did not check that closely, but I was still unsuccessful.
    My situation improved after I ran into an old friend named 
Mary Kate. Mary Kate had a business building, and the top of it 
she had converted to an apartment. And, knowing my parents very 
well and being sympathetic to my situation, she offered the 
apartment to me. I was in the apartment 2 hours later--after 
the approval. It was huge, it was empty, and I felt like I was 
living in a castle at that moment. No bed, no chair, no sofa, 
no nothing, because all of my furniture was still in Dallas 
where I was living when my parents became ill. She even brought 
me a few houseware items, some towels, et cetera, and I was one 
very happy person.
    During the period of time I lived there, I continued my 
search for a job. I continued my search for a student loan. I 
had reviewed what was available on the Internet and decided 
that I needed to increase my skills, particularly in the area 
of project management. So I applied to over 20 online schools 
and 3 physical schools for a student loan in order to take the 
courses and get my certification. Everyone turned me down. The 
information that I received when I asked why I was being turned 
down always included comments such as, ``Your information 
cannot be verified''; ``Your Social Security number did not 
match''; or ``We cannot find your records.''
    Finally, becoming concerned, I went to my local SSA office 
and asked them to check my records to see if I was in the files 
and if everything was fine. They did a very fast check, said, 
``No, your records are all in order. Everything is fine, and, 
yes, you are alive.'' I asked, ``Well, could there have been a 
mistake in the past?'' And I was informed at that time, ``We 
cannot check the past. If you had been listed at some time, 
when the new files are created on a weekly basis and sent out, 
your name would have been removed, and we do not retain 
those.'' So there was really no way for them to tell me if I 
had been listed or if I had not been listed. But since 
everything was in order, it was fine, and I thought I was fine.
    My situation at that point went from bad to worse. The 
apartment building that I had lived in--and this was 
approximately a year and a half later--a fire code made it 
necessary for me to leave. As an office building, it only had 
one entrance and exit, which was not acceptable in the Walker 
County area at that time.
    Again, I went on an apartment search. No luck, so, 
unfortunately, one more time I had to move back into the car. 
It was beginning to become a habit.
    The next thing that happened to me, in March 2010, I was 
involved in a car accident. A lady hit me, rear-ended me while 
I was sitting at a red light. I did not feel anything, hear 
anything. I woke up in the hospital a few days later and was 
told that I had seven vertebrae that were in pretty bad shape. 
They also kept asking me all of these questions, and there was 
a lot of confusion about my insurance, whether I owned the car 
that I was in, whether I really was who I said I was.
    So I called an attorney, turned everything over to a legal 
firm, and said, ``Whatever is happening, please get me out of 
this.''
    I went home--excuse me. When I say ``home,'' I mean a car. 
I went back to the car, started researching the DMF, and, 
frankly, trying to find anyone that could help me. During that 
time, I contacted the Internal Revenue Service (IRS), the 
Social Security Administration, the Fair Credit Reporting 
Agency (FCRA), everyone that I could think of and every name 
that came up in my searches for any information or any help. No 
agency could offer me any help.
    The first people that I spoke to that offered me any type 
of insight was Pam Dixon and Nina Olsen, both were of great 
help to me in providing information and also advice on what to 
do. Nothing to do, no apartment, still no job, still unable to 
find any kind of job. A couple at my church found out my 
situation and offered me a camper they had on their property in 
which to live. I graciously and humbly accepted the invitation 
and said, ``I will only be here for a few months, and then I 
will be out of your hair.'' Well, actually, I am still there.
    The good thing out of it is the fact that these people have 
become very close to me. They are very close to parents. They 
have taken me into their family, and I have really enjoyed 
knowing them. I will tell you that living in a camper, and 
especially with two puppies, is not a lot of fun, but I did 
that.
    The only work I have been able to obtain is work such as 
cleaning houses and caregiving. And, very candidly, coming from 
an executive position with a six-figure income, it is not 
something you like but something you do when you have to do it.
    One of the problems with the DMF, it is a bad database that 
paves the way for millions of dollars of identity theft, tax 
fraud, health care fraud, medical theft for both the living and 
the deceased, and the U.S. Government. It seldom goes away when 
it hits you, as with my experience. The problem is when you get 
one area cleared up, such as one credit reporting agency (CRA) 
or one banking institution report, someone calls in for a 
report, and when they are on the phone--and I have listened to 
this happen--they say, ``Well, this woman has applied for 23 
credit cards in a period of 4 years. No one needs that many 
credit cards. She cannot be honest.'' So then you are right 
back on the death list again, and nothing goes forward.
    So it is a matter of every time you get one spot solved, it 
pops up somewhere else. You get one school to approve a loan. 
Two weeks later, you get a notice because they have contacted 
other people, and they have denied the loan.
    So from a standpoint of trying to handle the entire 
situation, at this time have not figured out a way to control 
it. And I would like to say this: I had contacted all three 
CRAs, the major ones, the banking financial institutions that 
provide information. Only one company in a period of 3 years 
ever responded to me. They did not answer a phone call. They 
did not answer a letter. So I had no idea of what was going on 
and where.
    Finally, I contacted Mr. Ron Perholtz who started the DMF. 
Ron and his brother, Robert, had several conference calls with 
me. They checked their databases, and told me that I had been 
listed in January 2001. And, finally ChexSystems sent me a 
letter telling me that, yes, they had reported me as deceased, 
and the information they received was directly from the Social 
Security Administration and that I was listed as dead in 2008. 
They did not provide the month, however.
    So I found out where the information was coming from, but I 
did not find any way to stop it, even though I have been 
removed from the Death Master File.
    What I do not understand is in the research I have done, I 
have seen over 20 hearings in the Senate and in Congress on the 
Death Master File. So far I have seen nothing come out of any 
of these hearings. What I am hoping is that you will create a 
program that will, first of all, provide help for victims, 
because we have nowhere to go; second, that you will either 
stop distributing the database or find a way to toss it out, 
start over again, rebuild it, and do it correctly, and have 
zero mistakes.
    Thank you very much for having me here. I appreciate it. 
And, please, do something for the government and do something 
for the victims.
    Chairman Johnson. Well, thank you, Ms. Rivers. Very 
powerful testimony, and obviously that is the goal of this 
Committee hearing, to try and work toward solutions so this 
does not happen to another American.
    My question is: You have been removed from the Death Master 
File. Was that prompted by your action? Do you know when that 
occurred? Or have you just found out that it just happened?
    Ms. Rivers. Actually, I only found out in the last couple 
of weeks that I was actually listed on the Death Master File in 
2008. ChexSystems had--the one person that answered my letter--
sent me a letter that was dated August 22. The reality is I was 
still sending them correspondence in October and further. In 
this letter, it stated that they had reported me as deceased 
upon information received from the Social Security 
Administration and that I had died in 2008.
    Chairman Johnson. But, again, there was not a process of 
you working with the Social Security Administration where you 
filled out some forms and you knew that your name was removed 
from the Death Master File?
    Ms. Rivers. Yes, sir. Although I presented paperwork to 
check my DMF status, the SSA stated I was not and never had 
been listed on the DMF or that I had ever been removed.
    Chairman Johnson. You did go through that process?
    Ms. Rivers. I went through the process of completing forms 
several times in order to find out if I had been listed on the 
DMF.
    Chairman Johnson. But you only just found out that you have 
been removed?
    Ms. Rivers. Yes, sir. I had the letter, but, unfortunately, 
since the letter said, ``Send us all of your information, and 
we will do an investigation,'' I actually missed the part that 
said, ``We did report you as deceased in''--they did tell me 
the year.
    Chairman Johnson. OK.
    Ms. Rivers. ``We did report you as deceased. Based on the 
information from Social Security, you died in 2008.'' And then 
asked me to send them information and they would do an 
investigation.
    Chairman Johnson. OK. Well, we will ask some of those 
question of our other witnesses. And, again, I would encourage 
everybody to read Ms. Rivers' full testimony. It is a powerful 
story. Senator Carper.
    Senator Carper. Thank you so much for joining us. I 
apologize for what you have had to go through.
    Ms. Rivers. Thank you.
    Senator Carper. Somebody needs to, on a lighter note, I 
once asked a friend of mine, I said, ``Tell me about this Death 
Master File. What is it?'' And he said to me, with tongue in 
cheek, he said, ``It is a file in which you do not want your 
name to appear, because if it does you are dead.'' Well, as it 
turns out, not always. Not always. You are living proof that it 
does not always happen that way.
    If you had to go through this all over, knowing what you 
know now, what would you do differently? And, again, what 
specifically would you suggest that we do? Every one of us has 
constituent services teams in our States, and their job is to 
help people with a wide variety of problems. We are called 
every day. And one of the issues that we deal with a lot is 
Social Security. If you had been in Delaware, a citizen of 
Delaware, and you called my office or Senator Chris Coons' 
office or Congressman John Carney's, we would have been all 
over this, all over this on your behalf. So just keep that in 
mind. But what would you do differently? What should we do 
differently, having heard your testimony?
    Ms. Rivers. Right at this moment other than flying up to 
Washington and sitting in the Social Security Administration's 
office until I found some answers, I do not know what I would 
have done differently. Having been in the marketing and 
communications and business development area for 35 years, when 
I found out what was happening, I sat down and created a 
marketing plan for myself. And I am very thorough in that area, 
a letter campaign to companies all over the United States. I 
contacted everyone in the system that I could think of. I 
searched for companies. I found that if I had experienced a 
major identity theft right at the beginning, I would have been 
much better off because at that point I would have been 
alerted. I could have filed a police report and somebody would 
have started investigating. But at that point where there was 
no identity theft, very candidly no one really took it 
seriously and no one believed it.
    Senator Carper. OK. The second half of my question was: 
What should we do differently? Those of us who serve here in 
Congress, we serve you and the people in all 50 States. What 
should we do differently?
    Ms. Rivers. Regarding the DMF totally or just----
    Senator Carper. Just to try to make sure this kind of thing 
does not happen again to other folks in our country, given what 
you have learned.
    Ms. Rivers. Well, as I mentioned, I think the database 
needs to be cleansed thoroughly. I think an agency should be 
put in charge of it that actually can control it. Also, I think 
the sources from which the information is obtained should be 
clarified. I think very strong regulations should be placed on 
the agencies that are distributing this information, because 
one of the regulations is verify the information before it is 
used. I was listed twice. No one ever contacted me. And of all 
the people that I have talked to, no one has ever contacted 
them.
    The first thing I would do immediately is develop a 
complete communications program for people, both living people 
that have been listed mistakenly and families of individuals 
that have been deceased and the deceased person has been used 
for tax fraud, identity theft, draining a bank account, et 
cetera. These people have nowhere to go either, and they hurt 
just as badly as I do. But there is not one website, there is 
not one place to call, there is no one that knows anything. I 
visited 18 separate Social Security offices. Out of those 18, 
only 12 knew what the Death Master File was. So even within the 
Social Security system, the word is not getting through. These 
people need to be trained to provide information.
    Senator Carper. Thank you.
    Chairman Johnson. Senator Lankford, one question?
    Senator Lankford. Just a point of interest for me. How did 
you prove you are alive? What documents did you have to bring 
and the final shift on it when you finally had the opportunity 
to be able to explain to someone, ``This is really me, I am 
still alive''? What were you asked to be able to show to verify 
that?
    Ms. Rivers. The Social Security Administration asks for 
your birth certificate, if you have it; driver's license with 
photo or photographic ID. They would like to have copies of 
invoices or correspondence that you have received either at 
your place of business or your home, copies of check stubs. 
Every single thing that you have that would identify you as you 
and prove that it is you. And they are very thorough going 
through that material.
    All of that same material I included in every package I 
sent out to every company I contacted.
    Senator Lankford. OK. Thank you.
    Chairman Johnson. Senator Peters, one question?
    Senator Peters. Thank you, Mr. Chairman.
    Quite compelling testimony, Ms. Rivers. I also feel bad for 
you and apologize that you have gone through all of this. We 
have to get to the bottom of this. And I will say this is not 
the first time I have heard of this case. We actually had a 
case in Michigan earlier this year with a marine who was listed 
as dead twice and lost veterans' benefits and had the Treasury 
Department close his account, a whole host of difficulty. So, 
unfortunately, there are others that are in this situation, not 
just yourself.
    The question by far is the timeline. You mentioned in your 
testimony that in 2008 is when you learned that you were listed 
as dead. But you also mentioned that you went to the Social 
Security Administration, and they told you everything was OK, 
not to worry. Where was that in the sequence of events? And 
when did the record actually get cleared? Or is this something 
that you get constantly put back on the list? If you could 
clarify that for me, that would be helpful.
    Ms. Rivers. OK. Let me step back and clarify one thing. I 
did not learn that I was deceased in 2008. 2008 was when the 
problem started happening, but I was not aware of what was 
causing it. That is what caused me to go to the Social Security 
office.
    The first time I found out that I had been listed as 
deceased was when, after my accident, the insurance company 
settled, I went to a new bank and opened an account. And they 
were happy to open an account and take my money. When I went 
back 3 days later to open a savings account, they ran me 
through the system. The bank manager came over and ran me 
through the system, and said, ``We cannot help you today.'' And 
I said, ``Why not?'' And she said, ``Because information we 
have reports you as deceased.'' I demanded to know who was 
reporting the information and also where it was coming from and 
supposedly what date I died. They absolutely refused to tell me 
anything. By laws and under FCRA, I thought that I was entitled 
to that information. However, the bank refused to give it to 
me, and later when I found our ChexSystems was the one that 
supplied that information, they still refused to provide me 
with anything.
    So April 2010 was when I actually found out I was on the 
Death Master File.
    Senator Peters. And is that when you went to the Social 
Security Administration and----
    Ms. Rivers. Again. I had already been----
    Senator Peters. Several times?
    Ms. Rivers. Yes, sir.
    Senator Peters. And several times you had gone, and they 
had told you repeatedly you were OK.
    Ms. Rivers. Each time.
    Senator Peters. But it was clear you were not OK, as every 
time you turned around, it was not. So you were being given 
inaccurate information even though you were going into the 
office?
    Ms. Rivers. Correct.
    Senator Peters. Very good. Thank you.
    Chairman Johnson. Again, Ms. Rivers, thank you for your 
testimony. I think every Member of this Committee offers an 
apology and certainly our commitment that we are going to work 
with the people in the agencies to try and create law, create 
legislation that will prevent this from happening to another 
American. So thank you again for your testimony, and you are 
dismissed. Thank you.
    Ms. Rivers. Thank you, sir.
    Chairman Johnson. Our next witness will be Sean Brune. He 
joins us today from the Social Security Administration where he 
serves as a Senior Advisor for Audit in the Office of Budget, 
Finance, Quality, and Management. Mr. Brune.

   TESTIMONY OF SEAN BRUNE,\1\ SENIOR ADVISOR TO THE DEPUTY 
     COMMISSIONER, OFFICE OF BUDGET, FINANCE, QUALITY AND 
        MANAGEMENT, U.S. SOCIAL SECURITY ADMINISTRATION

    Mr. Brune. Thank you, Chairman Johnson, Ranking Member 
Carper, Members of the Committee. Thank you for inviting me to 
discuss steps to strengthen the integrity of Federal payments. 
I am Sean Brune, Senior Advisor to the Deputy Commissioner for 
Budget, Finance, Quality, and Management at the Social Security 
Administration. My remarks will focus on our collection of 
death information, its accuracy, and how we share it with other 
agencies.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Brune appears in the Appendix on 
page 61.
---------------------------------------------------------------------------
    We collect death information to timely stop paying Social 
Security beneficiaries who have died and to begin paying 
benefits to survivors. Each year, we post about 2.8 million 
death reports, primarily from family members, funeral homes, 
and States. This information serves us well, preventing around 
$50 million in improper payments each month.
    Over the years we have significantly improved our death 
information collection process, and this information is highly 
accurate. Of the millions of reports we receive annually, less 
than one-half of one percent are subsequently corrected. Still, 
we continually strive to improve the accuracy of our records.
    Since 2002, we have worked with States to increase the use 
of electronic death registration (EDR). EDR automates the death 
reporting process by enabling States to verify the name and 
Social Security number of a deceased individual against our 
records before they issue a death certificate or transmit a 
report of death to us. Thus, death information reported through 
EDR is the most accurate possible. Currently, 37 States, the 
city of New York, and the District of Columbia provide death 
reports to us through EDR.
    We are also currently carrying out a major multiyear 
redesign of our death information system to make it more 
efficient and reliable. Accurate information is important not 
only for the administration of our programs, but because we 
share the information with other agencies and with the public. 
As a result of a lawsuit brought against us under the Freedom 
of Information Act, we must share death information we collect 
and maintain from non-State sources. We do so by distributing 
information through the Department of Commerce. In sharing this 
public file, subscribers are informed, and have been informed 
for many years, that SSA does not have a death record for all 
persons, that we cannot guarantee the veracity of the file, and 
that the absence of a particular person is not proof that that 
person is alive.
    The Department of Commerce is authorized to share non-State 
death information on an immediate basis with entities that have 
a legitimate business purpose or a fraud prevention interest 
for such information. However, under the Bipartisan Budget Act 
of 2013, the public may only access non-State death information 
that is at least 3 years old. Congress put this restriction 
into place to ensure that fraudsters could not use a deceased 
person's personally identifiable information (PII) to seek a 
fraudulent tax refund.
    We are limited in our ability to share State death 
information. Specifically, under the Social Security Act, we 
may share State death information with agencies administering 
federally funded benefits. Thus, we share all of our death 
information, including State records, with the Centers for 
Medicare and Medicaid Services (CMS), the Department of 
Defense, and the Internal Revenue Service, among others.
    Treasury's Do Not Pay portal is an important part of the 
Administration's efforts to fight improper payments and allows 
Federal agencies to carry out a review of available databases 
with relevant information on eligibility before they release 
Federal funds. However, under current law, we cannot provide 
State death information to the Department of Treasury for 
purposes of Do Not Pay.
    To remedy this, the Fiscal Year 2016 President's budget 
includes a legislative proposal that would authorize us to 
share all of the death information we maintain with Do Not Pay. 
We note that S. 614, introduced by Ranking Member Carper, 
cosponsored by Chairman Johnson and recently considered by this 
Committee, also aims to address this gap. We would be happy to 
provide technical assistance to this Committee on its bill.
    We would also ask Congress to support the Department of 
Health and Human Services (HHS) request for funding to increase 
participation in EDR. Because death reports collected through 
EDR are highly accurate, we believe that universal adoption of 
EDR would be the single most effective step in ensuring that 
our death records are of the highest quality.
    Additionally, I would hope that you will support the robust 
package of program integrity-related legislative proposals, 
proposals that will help detect, prevent, and recover improper 
payments included in the President's Fiscal Year 2016 budget 
proposal.
    Finally, I would like to recognize the work of our Office 
of Inspector General--most recently in an audit in which they 
looked at death information and decades-old records. We are 
pleased that they found no fraud in either the Social Security 
program or any other Federal program. We have agreed with 28 of 
the 31 recommendations that the Office of Inspector General 
(OIG) has made in this area over the past few years. As I 
explain in my written statement, these recommendations have led 
to enhancements in our systems.
    Thank you for the opportunity to appear before you today to 
discuss this very important issue. I would be happy to answer 
any questions you may have.
    Chairman Johnson. Thank you, Mr. Brune.
    Our next witness is Patrick O'Carroll, Jr. He has been the 
Inspector General for the Social Security Administration since 
2004. Mr. O'Carroll has 26 years of service for the United 
States Secret Service. Mr. O'Carroll.

 TESTIMONY OF THE HON. PATRICK P. O'CARROLL, JR.,\1\ INSPECTOR 
            GENERAL, SOCIAL SECURITY ADMINISTRATION

    Mr. O'Carroll. Good afternoon, Chairman Johnson, Ranking 
Member Carper, and Members of the Committee. Thank you for the 
invitation to participate in this discussion.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. O'Carroll appears in the Appendix 
on page 68.
---------------------------------------------------------------------------
    My office investigates hundreds of cases of Social Security 
number misuse every year, but recently one incident stood out 
from the rest. A man opened two bank accounts with Social 
Security numbers that belonged to people born in 1886 and 1893. 
We can safely assume these people, who today would be 129 and 
122 years of age, are deceased.
    However, according to SSA's database of Social Security 
number holders, these people are alive. They are living in the 
sense that SSA does not have dates of death for either person 
on their number holder records.
    Our auditors followed up and found out these two records 
were anything but unique. We recently reported that 6.5 million 
people whose Social Security records indicate that they are 
over 112 years old do not have a date of death on their Social 
Security number record. Without a date of death in SSA's 
database, these people do not appear on the agency's Death 
Master File.
    I should note that none of these aged number holders are 
improperly receiving Social Security benefits, and overpayments 
are not occurring. But these inaccuracies create a significant 
void in SSA's death data that is available to the public. We 
have recommended that SSA update the records and resolve the 
discrepancies we identified in our report.
    This audit is relevant to today's discussion on improper 
payments because benefit-paying agencies like HHS and the IRS, 
and other public and private entities, use the Death Master 
File to verify deaths and ensure payment accuracy.
    Additionally, as the Committee knows, the Improper Payments 
Elimination and Recovery Improvement Act of 2012 included a Do 
Not Pay provision which requires Federal agencies to review 
lists of deceased or ineligible individuals before making 
payments. The Death Master File is one of those lists. To 
identify and prevent its own and other agencies' improper 
payments, SSA must collect and maintain accurate death records. 
It is equally important to ensure living individuals are not 
listed as deceased in SSA's records.
    There are less than 1,000 cases each month in which a 
living individual is mistakenly included on the Death Master 
File. SSA said it moves quickly to correct the situation when 
errors occur. The agency reports that it has not found 
conclusive evidence of past data misuse. However, we remain 
concerned because these errors can lead to premature benefit 
termination and Social Security underpayments and cause 
financial hardship and distress to those affected.
    I have addressed in my written statement recent actions 
that limit the sharing of personal information on SSA's death 
records and will delay the public release of death data through 
the Death Master File. We believe these actions could mitigate 
some of the issues I just mentioned.
    SSA must accurately process the death reports it receives 
to terminate payments to deceased beneficiaries and avoid 
overpayments. In several audits, we have estimated SSA has paid 
millions of dollars to beneficiaries after their deaths.
    Based on our audit work and recommendations, SSA now 
matches and corroborates its payment records with its number 
holder records every month and exchanges data with HHS to 
identify deceased beneficiaries based on their enrollment in, 
but non-usage of, Medicare. These initiatives have improved 
SSA's ability to process benefit terminations due to death, 
recover overpayments, and refer allegations of deceased payee 
fraud to our office.
    Last year, we investigated over 600 people for deceased 
payee fraud. These are cases of individuals who conceal 
someone's death to illegally collect their Social Security 
benefits, with criminal convictions of about 150 people and $55 
million in recoveries, restitutions, and projected savings.
    In one example, a woman collected her mother's Social 
Security and Federal Civil Service benefits for 35 years after 
her mother died. SSA identified this case through the Medicare 
Non-Utilization Project and referred it to us to investigate. 
Last year, the woman pled guilty to government theft and was 
sentenced to 18 months of house arrest. She was ordered to 
repay about $350,000 to the SSA and OPM. This is a high 
investigative priority. Cases of deceased payee fraud can lead 
to significant government recoveries and savings, and Federal 
prosecution efforts help deter others from committing this 
crime.
    Before I conclude, I want to acknowledge that our auditors' 
and special agents' outstanding work on this topic has recently 
garnered national media attention. We are pleased that our 
efforts are making an impact and promoting overdue discussions 
on these issues. But I speak for my entire staff when I say we 
do not do this work to make news headlines. We do this work, 
and we will continue to do it to ensure the integrity of SSA's 
programs and to promote public confidence in Social Security 
and the Federal Government. This is and always will be our sole 
mission.
    We will continue to work with SSA and your Committee to 
address the issues discussed today. Thank you again for the 
invitation to testify, and I will be happy to answer any 
questions.
    Chairman Johnson. Thank you, Mr. O'Carroll.
    Our next witness is Mr. David Mader. He is the current 
Controller of the Office of Management and Budget. Mr. Mader 
held various positions at the IRS from 1971 to 2003 and then 10 
years in the private sector before rejoining the Federal 
service. Mr. Mader.

  TESTIMONY OF THE HON. DAVID MADER,\1\ CONTROLLER, OFFICE OF 
                     MANAGEMENT AND BUDGET

    Mr. Mader. Thank you, Chairman Johnson, Ranking Member 
Carper, and distinguished Members of the Committee, for 
inviting me here today to discuss the Federal Government's 
ongoing efforts to prevent, reduce, and recapture improper 
payments. I appreciate the opportunity to provide an update on 
this important topic. Our partnership with the Congress, 
consultation with GAO, and the important support of the IG 
community over the years has been vital to our efforts.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Mader appears in the Appendix on 
page 74.
---------------------------------------------------------------------------
    Addressing improper payments is a central component of this 
administration's effort to eliminate waste, fraud, and abuse. 
When the President took office in 2009, the improper payment 
rate was 5.2 percent, an all-time high. Since then, the 
Administration, working together with the Congress, has made 
progress by strengthening the accountability and transparency 
through annual reviews by Inspectors General and expanded 
requirements for high-priority programs such as the requirement 
to report supplemental measures and program information on 
paymentaccuracy.gov. As a result of this concerted effort, in 
2013 we reported an improper rate of 3.53 percent.
    During fiscal year 2014, we experienced an improper payment 
rate increase in major programs including Medicare Fee-for-
Service, Earned Income Tax Credit (EITC), Medicaid, and 
Unemployment Insurance. Over the same period, other major 
programs experienced improper payment rate decreases, including 
Medicare Part C, the Supplemental Nutrition and Assistance 
Program (SNAP), and Public Housing/Rental Assistance. As a net, 
these changes resulted in a governmentwide improper payment 
rate of 4.02 percent, or $125 billion. Notwithstanding this, 
agencies recovered roughly $20 billion in overpayments through 
payment recapture audits and other methods in 2014.
    While progress has been made over the years, the time has 
come for a more aggressive strategy to reduce the levels of 
improper payments that we currently are seeing. That is why the 
Administration has proposed to make a significant investment in 
activities to ensure that taxpayer dollars are spent correctly, 
by expanding oversight activities in the largest benefit 
programs and increasing investments.
    Over the years the Administration has worked with the 
Congress on legislation regarding this topic, and these laws 
have provided agencies with new tools and techniques to 
prevent, reduce, and recover improper payments.
    The President's Fiscal Year 2016 budget provides the 
opportunity to build on this congressional support and 
administration activities to reduce improper payments. There is 
compelling evidence that investments in administrative 
resources can significantly decrease the rate of improper 
payments and recoup many times their initial investment.
    Examples of proposals in the fiscal year 2016 budget 
include: a robust package of Medicaid and Medicare program 
integrity proposals; strategic reinvestments in the IRS; a 
robust package of Social Security program integrity proposals; 
a proposal to expand the Department of Labor's initiative to 
conduct Reemployment and Eligibility Assessments and 
Reemployment Services; and improving further the accuracy of 
the Death Master File by sharing across multiple agencies.
    And this began long before we knew what the improper 
payment rate was going to be for the Office of Management and 
Budget issued an appendix to its circular on internal controls 
entitled, ``Requirements for Effective Estimation and 
Remediation of Improper Payments,'' and agencies were 
instructed to re-examine improper payment strategies on a 
number of fronts governmentwide. These new guidelines were 
issued in October 2014 and provide strategies for agencies and 
Inspectors General on key improper payments.
    In addition to these governmentwide initiatives, on 
February 26, 2015, the Director of OMB sent letters to agency 
heads in four organizations--Department of Labor (DOL), HHS, 
SSA, and Treasury--that have the largest priority programs. 
This direction requires the early implementation of the 
Appendix C requirements that I just mentioned by April 30 of 
this year.
    The direction further requires that each agency conduct the 
following analysis and present it to OMB: one, provide a 
comprehensive corrective action plan for each program in 
question; two, review new categories for reporting improper 
payments; and, three, provide analysis linking the agency 
efforts in establishing internal controls to the internal 
controls that they have for improper payments.
    Under this administration we have focused on the increased 
use of technology and sharing data to address improper 
payments. The effective use of data analytics also provides 
insight into methods of improving performance and 
decisionmaking capabilities.
    Examples of agencies currently using data analytics to 
prevent improper payments include the CMS' Fraud Prevention 
System and DOL's Integrity Center of Excellence.
    Improper payments remain a priority to this Administration. 
Although progress has been made, much more remains to be done, 
and we need your help. We look forward to working with the 
Congress to pass the President's 2016 budget, and we expect 
additional progress as we execute against our new improper 
payments guidance during this fiscal year.
    Thank you for giving me the opportunity to testify, and I 
look forward to your questions.
    Chairman Johnson. Thank you, Mr. Mader.
    Our next witness is Ms. Beryl Davis. Ms. Davis is the 
Director of Financial Management and Assurance at the 
Government Accountability Office. Ms. Davis.

TESTIMONY OF BERYL H. DAVIS,\1\ DIRECTOR, FINANCIAL MANAGEMENT 
     AND ASSURANCE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE; 
ACCOMPANIED BY DANIEL BERTONI, DIRECTOR, EDUCATION, WORKFORCE, 
                      AND INCOME SECURITY

    Ms. Davis. Chairman Johnson, Ranking Member Carper, Members 
of the Committee, thank you for the opportunity to be here 
today to discuss improper payments and the use of death data to 
prevent payments to deceased individuals.
---------------------------------------------------------------------------
    \1\ The joint prepared statement of Ms. Davis and Mr. Bertoni 
appears in the Appendix on page 80.
---------------------------------------------------------------------------
    In fiscal year 2014, Federal agencies estimated that 
improper payments totaled $124.7 billion. This represents a 
significant increase of almost $19 billion from the fiscal year 
2013 estimate. The increase can be attributed primarily to 
increased error rates in three major programs: Medicare Fee-
for-Service, Medicaid, and the Earned Income Tax Credit. These 
three programs accounted for about 65 percent of the 2014 
estimate.
    Nevertheless, improper payments are a governmentwide 
problem. The $124.7 billion estimate was attributable to 124 
programs across 22 agencies. Twelve programs had estimates 
exceeding $1 billion. One large program, Temporary Assistance 
for Needy Families (TANF), with outlays of more than $16 
billion, did not report an estimate, citing statutory 
limitations.
    Senator Carper. Say that again, please.
    Ms. Davis. TANF, with outlays of more than $16 billion, did 
not report an estimate, citing statutory limitations.
    In the Financial Report of the U.S. Government for 2014, 
GAO reported the issue of improper payments as a material 
weakness in internal control because the Federal Government is 
unable to determine the full extent to which improper payments 
occur and reasonably assure that appropriate actions are taken 
to reduce them.
    Inspectors General are required to report annually on their 
agencies' compliance with criteria in improper payments 
legislation. In December 2014, we reported that 10 agencies did 
not comply with all of the criteria for 2013, as reported by 
their Inspectors General. The two most common areas of 
noncompliance were publishing and meeting improper payment 
reduction targets and reporting error rates below 10 percent.
    There are a number of strategies that agencies can employ 
to reduce improper payments, including analyzing the root 
causes of improper payments in order to design and implement 
effective preventive controls.
    One major root cause for improper payments is insufficient 
documentation. For example, HHS reported this is a primary root 
cause of improper payments for home health claims in its fee-
for-service program.
    Another driver for many programs, such as the Earned Income 
Tax Credit Program, is agencies' inability or failure to verify 
eligibility requirements, including recipient income or the 
number of dependents.
    One example of preventive controls to address underlying 
root causes is eligibility validation through sharing of data, 
such as the SSA death data. The Do Not Pay initiative is a Web-
based centralized data matching service that allows agencies to 
review multiple databases, including certain death data 
maintained by SSA, to determine payment eligibility prior to 
making payments. SSA is uniquely positioned to collect and 
manage death data to help prevent improper payments at the 
Federal level.
    SSA maintains two sets of death data. Its full death file, 
which is only available to certain eligible entities, contains 
data from many sources, such as funeral directors, family 
members, other Federal agencies, and States. The Death Master 
File, which is available to the public, is a subset of the full 
file because it does not contain death data from States.
    While reviewing death data can be a useful tool for 
agencies, there are opportunities for SSA to improve the 
accuracy and completeness of these data. We have reported that 
SSA's procedures for collecting, verifying, and maintaining 
death reports could result in untimely or erroneous death data.
    For example, we reported in November 2013 that SSA did not 
independently verify death reports for all Social Security 
beneficiaries or any non-beneficiaries before including them in 
death records.
    When data is not verified, there is an increased risk that 
such data will be inaccurate or incomplete. This can result in 
other Federal benefit-paying agencies using these data to make 
improper payments.
    In our November 2013, we identified several types of errors 
with SSA's death data. For example, we found instances of 
records where the date of death preceded the date of birth and 
records showing recorded ages at death between 115 and 195 
years of age.
    We recommended that SSA conduct a risk assessment to 
identify the scope and extent of these types of errors, ways to 
address them, and the feasibility and cost-effectiveness of 
doing so.
    Our report also noted that SSA lacked written guidelines 
for determining agency eligibility to access the full death 
file. We recommended that SSA develop and publicize guidance to 
more systematically determine access eligibility and, thus, 
better inform agencies as to when they might be eligible for 
access to more complete death data.
    Because death data can be a useful tool in data matching to 
prevent improper payments, continuing efforts are needed to 
help minimize the risks posed by inaccurate and incomplete 
death data and ensure that agencies receive appropriate access 
to these data.
    As a final point, we would like to emphasize that with 
outlays from major programs expected to increase, it is 
critical that actions are taken to reduce improper payments. 
There are considerable opportunities for agencies' auditors and 
other members of the accountability community to work together 
with Congress in ensuring that taxpayers' dollars are 
adequately safeguarded and used for their intended purposes.
    Chairman Johnson, Ranking Member Carper, Members of the 
Committee, this completes my prepared statement. I, along with 
my colleague, Mr. Bertoni, who does work on the Death Master 
File, are happy to answer any questions.
    Chairman Johnson. Thank you, Ms. Davis. I was actually 
going to point out the fact that Mr. Bertoni has joined the 
panel here. He is the Director of GAO's Education, Workforce, 
and Income Security team, and he might assist in answering 
questions.
    I will start questions with Mr. Brune. Prior to coming here 
today, did you take a look at Ms. Rivers' case just to find out 
exactly what the status is with her current status?
    Mr. Brune. Senator, the news media did not share the case 
with us beforehand. I did know that Ms. Rivers was testifying 
today. I did not look at the specifics of her case. I think it 
would be unwise to discuss that in an open forum. But I would 
be happy to answer questions about the scenario.
    Chairman Johnson. Fair enough. How many people are you 
aware of are in Ms. Rivers' position?
    Mr. Brune. Fewer than 9,000 a year have that circumstance 
happen to them. Usually, Senator, we learn of the occurrence by 
the individual reporting it directly to us. We advise the 
individual that we can correct their record if they visit our 
office. As Ms. Rivers identified, we request that an individual 
bring several proofs of identity with them, including a State-
issued form of identity, a birth certificate if they have one, 
so that we can correct the record. And when the individual 
leaves our office, we issue them a letter indicating that there 
was an error and that it has been corrected.
    Chairman Johnson. So the name may be removed from the Death 
Master File, but the effects continue to linger, correct? Can 
you just describe what happens there with credit agencies and 
banks and credit card companies?
    Mr. Brune. Sure. The Social Security Administration shares 
the public Death Master File--as Ms. Davis just indicated--that 
does not include State data, but still contains around 84 
million records--with the Department of Commerce. Commercial 
entities can procure that file from the Department of Commerce. 
It is widely used across not only the government but the 
commercial sector as well.
    The Department of Commerce requires parties that receive 
that information to subscribe to updates, but sometimes some 
entities who have looked at a Death Master File have not looked 
at the most current Death Master File.
    Chairman Johnson. So how often do you update your Death 
Master File with Commerce?
    Mr. Brune. Weekly.
    Chairman Johnson. Weekly. And how often are the commercial 
entities required, supposedly, to update those files?
    Mr. Brune. It depends on the contractual arrangement that 
an entity has with the Department of Commerce.
    Chairman Johnson. Can you describe how somebody who is 
listed on the Death Master File, how identity thiefs can create 
fraud with those names? I can understand the Master File is 
published and people can quickly try and claim a tax refund 
with that Social Security number, which is why now the law 
states that that information is going to be held for 3 years. 
But how else is that fraud committed?
    Mr. Brune. Well, I think our Inspector General might be in 
a better position to answer that.
    Chairman Johnson. Mr. O'Carroll.
    Mr. O'Carroll. Yes, Chairman. One of the ways that we are 
finding that the fraudsters are doing it is they will go to one 
record that is out there, for example, a State record listing 
all the deceased people in it. And then they will go, and they 
will take a look at the Death Master File and see if a person 
is alive in one record and then dead in the other record. And 
then what they will do is they will claim to be that person and 
then go after their benefits. So that is one method of it.
    And as we know, in other cases, they will adopt the name 
and the information of the person and then file for credit and 
default.
    Chairman Johnson. Mr. Brune, is there a law that prevents 
you from doing this? Why do not we just purge the Death Master 
File from anybody over a certain age?
    Mr. Brune. Let me first say, Senator, that the records from 
which we extract the Death Master File we procure largely from 
the States. The primary reporters are State Bureaus of Vital 
Statistics, the individual's family members, doctors. The 
database contains over 100 million records. We have collected 
this information since SSA began, approximately 80 years ago.
    The recordkeeping processes, as you might imagine, have 
evolved over 80 years. In most cases, our current program 
policy requires evidence of death. The risk in just doing a 
blanket update or blanket change in data is that it is highly 
likely that we would create another scenario just like Ms. 
Rivers, because in the IG's report they identified--in that 
group of 6.5 million records--that there were, in fact, living 
individuals. The reason that is, is because oftentimes 
individuals who are auxiliaries on the record--spouses, 
children, et cetera--are listed under a wage earners number and 
thus are connected in our databases. But the way we connected 
them in years past is not as accurate as it is right now. So it 
is possible that while the primary number holder--the wage 
earner may be deceased, there are records linked to that that 
are records of individuals that are not deceased.
    So the primary reason we do not do that is that we want to 
prevent any inadvertent additions to the DMF of individuals who 
are still alive.
    Chairman Johnson. Mr. O'Carroll, we are talking about how 
many people over 112 that you identified?
    Mr. O'Carroll. 6.5 million, Chairman.
    Chairman Johnson. Right. On the Numident file, correct? 
That is where we need to purge these.
    Mr. O'Carroll. Yes.
    Chairman Johnson. This is where we want to put in a date of 
death, basically, correct?
    Mr. O'Carroll. Correct.
    Chairman Johnson. But how many people actually are living 
today that are over 112?
    Mr. O'Carroll. Well, in one of SSA's databases it will show 
them as deceased, and then in another database it will show 
them alive, and there are 1.4 million of them. And we have not 
set any number in terms of the actual living. We use the 
estimate similar to Mr. Brune's of about 1,000 a month living 
people are listed on the Death Master File.
    Chairman Johnson. But, again, those would be much younger 
people, so I am still not getting a good answer to my question. 
Why do not we just purge the Numident--or list on the Numident 
a date of death for people that are over--I do not know, let us 
start with 150. Then maybe next month we knock it down to 140, 
then 130, and have some protection for somebody that just 
might--again, when we are talking about 6.5 million records out 
there, obviously there are about 6.499999 million of those 
people that really are dead and are not going to be affected by 
this. But why do not we do that to prevent the type of fraud 
that this type of situation occurs or allows?
    Mr. O'Carroll. Well, correct, Chairman, on that. One of our 
recommendations is just as you are saying with purging it. One 
thought is that SSA could just make a notation on each of those 
files of people over 112 years of age like they do for other 
reasons. If you have to get a replacement Social Security 
number as a battered spouse, for security reasons, they put a 
notation or a SPINCODE and it shows that you have two Social 
Security numbers. What we are recommending is that they just 
put a record like that on all the people over 112 years of age, 
so that way, one, it would reflect the SSN as inactive but 
also, if accidentally somebody who had a birth date of, let us 
say, 1957 and it was keyed in as 1857, when they realize that 
they are losing benefits, it would be easy for SSA to remove 
the code.
    Chairman Johnson. So can the Social Security Administration 
do that themselves administratively, or do you need Congress to 
pass a law to allow that to happen?
    Mr. Brune. Senator Johnson, we are currently in the 
analysis phase of doing just that. The audit was issued 
approximately 10 days ago. The good news is Mr. O'Carroll and 
his team have looked at this topic previously, so we had begun 
an analysis prior to the audit's release. So far we have been 
able to electronically verify data and update 200,000 records 
based on prior audits. We are currently initiating the review 
of those 6.5 million records. We are hopeful that there is 
information in our data set that will allow us, maybe not to 
confirm the actual date of death but to confirm that an 
individual is deceased and that individual's SSN can be marked 
as such.
    Chairman Johnson. When you complete your analysis and you 
need a legislative fix for this, please come to us as quickly 
as possible. Senator Carper.
    Senator Carper. Thanks very much. Again, our thanks to all 
of you. Mr. Bertoni, nice of you to join us. We appreciate it. 
I am going to ask you a question. We are not going to let you 
just sit here and just look good.
    Mr. Bertoni. Sure.
    Senator Carper. We are going to ask you to give us some 
good advice.
    I want to go back a little bit in time. I never thought 
much of improper payments until 2002, and I think it was a 
House member who proposed that we at least start requiring 
agencies to note what improper payments are and, second, begin 
reporting them. And every year after that, 2003, 2004, 2005, I 
noticed there was an increase in the level of improper 
payments, and I did not feel good about it because the number 
just kept going up. And somebody finally said, well, the reason 
why they are going up is more and more agencies are actually 
getting on board and beginning to report improper payments.
    I am still not convinced the Department of Defense fully 
reports their improper payments. You may be a better judge of 
that than I am.
    But around 2010, we reached a point where Dr. Coburn and I 
sensed that maybe most of the lion's share of agencies were 
actually reporting their improper payments. And we added a 
reform. Not only did we want agencies to figure out--to record 
their improper payments, and report them. That was the 2002 
law. We said we also want the agencies to stop making improper 
payments. We also said we want them to the extent they can 
recover monies, we wanted them to recover monies.
    Did somebody report that last year--I thought I heard $20 
billion was recovered.
    Mr. Mader. $20 billion, sir.
    Senator Carper. $20 billion. That is a good amount of 
money. And our next step was to say we want to help the 
administration on Do Not Pay, the Do Not Pay list, which was 
part of, I think, our 2012 legislation.
    Last Congress, we tried to go further and go after payments 
to dead people and that sort of thing. And we did not get our 
legislation through the House, because of the objection of one 
Subcommittee within the Ways and Means Committee, and so we are 
going to take another run at it.
    I was stunned when I saw the number, the improper payments 
number, for 2014, because we had seen during a number of years 
that the number was going down beginning in 2010, 2011, 2012, 
2013. And then it pops up by about $20 billion in 2014.
    Our friend Mr. Mader has given us, I think, a very good to-
do list--I mentioned this to the Chairman--a very good to-do 
list on, I think, pages 2 and 3 of his testimony. I will not go 
through it all, but it involves program integrity work in a 
variety of areas. And it involves actually spending some money 
at the IRS to give them the tools that they need. I think we 
have a lot of people who do work on the Earned Income Tax 
Credit filings. I think about two-thirds to three-fourths of 
the people who help people file for the EITC are people that 
are not CPAs. They might be very good people, but they are not 
really regulated by the Treasury. They may not have the kind of 
credentials that we might hope.
    I want you to drill down on that point. There is a lot of 
talk here, a lot of important discussion on the Social Security 
aspects of this and paying people that are dead and having 
folks listed that are 150 years old. I want you to drill down 
for us on the EITC. I want you to drill down on the credentials 
of the folks that are literally helping most people file for 
the EITC and what the problem is here and what we should do 
about it.
    Mr. Mader. Thank you, Senator. Well, I think----
    Senator Carper. Because it is a lot of money. As I recall, 
it is a lot of money.
    Mr. Mader. It is a lot of money, and I think it is 
important to at least step back and remember that the Earned 
Income Tax Credit Program was passed under President Reagan 
back years and years ago.
    Senator Carper. I think he called it the ``best anti-
poverty program in the country,'' and he was probably right.
    Mr. Mader. And last year, actually 26 million American 
families benefited from that program, so I think it is a 
program that over the decades has proven its value. And I 
think, Senator, you touched on--and, actually, Ms. Davis 
touched on it, too. It is a program that has a high degree of 
complexity in that it is really based on claiming dependent 
children at a certain income level. And, with separations, with 
divorces, establishing the custodial parent, making that 
determination, and then also as Ms. Davis testified, actually 
verifying the income when you are making that credit adds to 
the complexity of that program.
    But I think you touched on an area that the Administration 
has been asking for help of the Congress over the last couple 
years, and that is the fact that well over 50 percent of these 
26 million EITC payments are actually done by third-party 
providers who are not CPAs, they are not enrolled agents, they 
are not individuals who are authorized to actually represent 
you or I in front of the Internal Revenue Service. They are 
just preparers.
    And having dealt with this issue for a number of years at 
the IRS, I am struck by the fact that as a society we seem to 
register, regulate, and license electricians and plumbers and 
health care workers, yet we do not want to regulate individuals 
who actually have a partnership with the IRS in administering 
the tax administration and this important credit in a very fair 
way--fair to the taxpayers and fair to the government.
    So I think in the President's budget he once again asks for 
a series of initiatives, whether it be resources or some 
assistance in regulating and licensing these preparers.
    Senator Carper. I would just say to my colleagues, I would 
just invite their attention to your testimony, and I think it 
maybe starts on pages 2 and 3. But it says, ``Examples of 
proposals that are in the 2006 budget include,'' and you give 
us five or six really good ideas for--I call it a ``to-do 
list.'' I like to say GAO gives us a good to-do list every 
other year, the high-risk list, and you have given us a really 
good to-do list, and I hope we take it seriously. I plan to.
    Let me just ask each of you, starting with you, Mr. 
Bertoni, you heard this other testimony. You heard the 
testimony of the opening witness. Give us one thing--say if you 
do nothing else, Committee, Senate, do this to address this 
problem.
    Mr. Bertoni. I think the first step is to really look at 
cleaning up the data in the file. There is a lot of noise in 
that file. When I hear things like we receive millions of 
reports annually, less than one-half of one percent are 
corrected, that gives me a real concern that this is being 
brushed off in some ways. We know there are issues. We know 
there are problems. And it is easy to say that when you are not 
looking at large blocs of cases. If you are not verifying 
reports from family members, if you are not verifying reports 
from funeral directors, if you are not verifying reports from 
folks who are non-beneficiaries, and last, you are not 
verifying reports where some piece of the data does not match 
the Numident record, that is a significant potential amount of 
potential non-matches that you might have to correct down the 
road had you done those verifications.
    And to tee off Pat's report, you cannot fix 6.5 million 
reports if you do not know about it. So we have to look at the 
integrity of the data, clean it up, whether it is a lookback or 
whether it is prospective, but there is a lot of noise in this 
file that needs to be taken care of before it can be a much 
better program integrity tool.
    Senator Carper. Good. Thank you very much, all of you.
    Chairman Johnson. Senator Lankford.

             OPENING STATEMENT OF SENATOR LANKFORD

    Senator Lankford. Thank you. Thank you all for being here. 
I will get a chance to talk through several things.
    Let me just make a quick comment, Social Security 
Administration. This has been an ongoing issue for a while that 
several of us have talked about dealing with Social Security 
disability. I know this Committee for a while has dealt with 
it. I have dealt with it for quite a while as well. I have a 
letter that is still outstanding with SSA dealing with the 
Notice of Proposed Rulemaking from February of last year 
dealing with just getting a full record, medical record that 
has to be submitted. I am not going to bring that up today, but 
just saying that is a letter that is outstanding. We know that 
that is coming, are still watching for that and anticipating 
that to be able to come soon. So I am not going to try to ask 
you a question directly because that is not related to this 
hearing, but I did want to tell you we are still waiting.
    Mr. Mader, let me ask you a question. Is the Social 
Security Administration the right place to be able to manage 
the Death Master File? It seems like that has kind of grown up 
organically as a place that is going to be gathered. Is that 
the right spot, according to OMB? Or is there a better place to 
be able to manage that file?
    Mr. Mader. Senator, we believe that Social Security is the 
organization that is best suited to collect this data, and I 
think as my two colleagues from Social Security have testified, 
they are receiving the information both directly from families, 
from funeral homes, from States, but I think what we have is a 
process and a system that needs to be expanded. As both 
gentlemen testified, we do not have every State that has access 
in using the electronic system, which clearly improves the 
quality of the data.
    So I think a lot of the fixes that we talked about today 
need to be put in place.
    Senator Lankford. But fixable in that current structure and 
leave it in SSA?
    Mr. Mader. Yes, I believe so. Yes, sir.
    Senator Lankford. The Social Security Administration, do 
they feel like this is part of their mission to be able to keep 
up this file, this is important? Because obviously it is being 
shared with multiple agencies, multiple entities are looking to 
the Social Security Administration to get that information.
    Mr. Brune. Senator, it is important to understand that we 
do need the death information to administer our programs. The 
use of our death information, because it is consolidated across 
multiple reporting sources and it is, in fact, very reliable, 
has grown in value over time, and so now those records are 
being used for purposes they were not intended for when they 
were actually collected decades ago. A date of birth and a date 
of death from several decades ago, nobody envisioned that in 
this day and age that it would be available electronically to 
multiple parties outside the agency.
    Senator Lankford. But is that something the agency sells at 
this point? What is the asset there?
    Mr. Brune. We provide the information to the Department of 
Commerce. Commerce distributes it.
    Senator Lankford. OK. Is there a cost to that from Commerce 
or a cost to Commerce or to other agencies that they pay to be 
able to get that information?
    Mr. Brune. Yes, there is. We are reimbursed for our cost to 
generate the file.
    Senator Lankford. OK. What about to private entities?
    Mr. Brune. Commerce deals with the private entities.
    Senator Lankford. Does that come back to the Social 
Security Administration to reimburse them? Or----
    Mr. Brune. No.
    Senator Lankford [continuing]. Come back to Commerce?
    Mr. Brune. Commerce.
    Senator Lankford. OK. Do States charge us to be able to get 
that information?
    Mr. Brune. Do States charge us?
    Senator Lankford. Yes.
    Mr. Brune. It depends on their purpose. If they are 
administering a federally funded benefit, they are entitled to 
the data.
    Senator Lankford. But when you get the death information 
from States, do they charge the Social Security Administration 
for that information?
    Mr. Brune. We pay the States to provide us death 
information.
    Senator Lankford. That is what I am asking. So then how 
much are we paying the States for that?
    Mr. Brune. It depends on whether they provide it via 
electronic death registration. Today that price ranges from is 
$3.09 to $0.86 per record, depending on how quickly we receive 
it. The reason we offer a premium there is--it comes to us now 
pre-verified. So the State has run the name and number against 
our record and confirmed that it is a match. We also get the 
reports more timely.
    Senator Lankford. So give me an approximate cost there? We 
are talking $3 a person to be able to get that information----
    Mr. Brune. Generally, $3 a record, correct. And for those 
that send the information via non-electronic death registration 
means, it is under $1 reimbursement.
    Senator Lankford. And then what does SSA do with that then 
to be able to verify? It has not been verified. You bought the 
information for $1 from the States. Then is it $2 cost to be 
able to go and verify those records?
    Mr. Brune. We annotate our records that it is an unverified 
report, and we would have to verify the information in order to 
process it for our benefit purposes.
    Senator Lankford. OK. So then once it is processed, is 
there a public and an internal on this Death Master File? I am 
trying to figure out the process here. We are now paying to get 
the records. We are selling those to Commerce who is then 
selling it to agencies and other private individuals to recoup 
the cost here. We have a lot of money and a lot of names that 
are moving at this spot and to be able to verify that. So once 
we go through the verification--how much does it cost to verify 
someone that is a non-verified name coming from a State?
    Mr. Brune. Well, it is not a discrete unit cost that is 
easy to come to----
    Senator Lankford. Is there an average cost? I am sure that 
it is going to cost more for others, but does SSA have an 
average cost on that?
    Mr. Brune. Well, usually what we do is we have one of our 
technicians contact a family member and confirm the death.
    Senator Lankford. OK. According to the OIG report--and I 
want to be able to ask you about this, Mr. O'Carroll found 
180,000 individuals who died while receiving disability 
payments but were not recorded in the Death Master File. 
Obviously, they are already in the Social Security disability 
process as well. There were e-verify requests for those 
deceased individuals and more than 90 voter registrations in 
that group that were already dead.
    So help me understand this process. As you see it at this 
point, we have verified records from States. SSA is verifying 
them when they are coming in, yet we have 6.5 million that are 
over 112 years old, and we have individuals that are on Social 
Security disability, 180,000 individuals that you found that 
are already dead.
    Mr. O'Carroll. Well, Senator, that is our biggest concern 
when we take a look at living people over 112 years of age, 
when we did our audit on it, there were 13 people in the United 
States. By the time we finished our audit, there were 109. And 
we figured there are about 35 people over 112 in the whole 
world.
    So, anyway, all those valid Social Security numbers that 
are out there, if somebody takes those numbers, then they can 
start misusing them, and our biggest concern on it, is that 
they will be ending up using--our concern on it is that when 
that information gets out there, somebody can impersonate 
another person, they can vote, they can get driver's licenses, 
et cetera.
    Senator Lankford. So are these names that have never been 
submitted by a State so they have not been verified by SSA 
because no one has ever turned those names up the first time?
    Mr. O'Carroll. Most of the 112 are from years ago, back in 
the 1970s, when people came in and reported themselves----
    Senator Lankford. What about these on disability, that you 
found these individuals that are already deceased that are also 
on the disability roll?
    Mr. O'Carroll. We are finding with that issue on it--we are 
finding people that are listed as deceased and getting 
benefits. The Numident, which is the record that we are talking 
about today, the one that is used for the Death Master File, is 
one file at SSA. And then the other file, the Master 
Beneficiary Record, is another file. So when somebody calls in 
and says that there is a deceased person, to immediately stop 
the benefits from going out, SSA puts it right on the payment 
record and stops it. But they may not put it on the Numident--
and Sean could probably describe it a little bit better. It 
gets confusing when you are talking auxiliaries and different 
things like that. So then the Numident does not list the person 
as being deceased, and that is where the big issue is. Two 
different records.
    Senator Lankford. And they are opening bank accounts, they 
are voting. All these different things that you found as you 
went through this process on these false Social Security 
numbers then are people that have died or their number is still 
being used.
    Mr. O'Carroll. Correct. And it gets even more complicated 
in terms of that--as I said before, when somebody knows that 
SSA thinks that a person is alive, but they know the person is 
dead, they might even try to get Social Security benefits.
    Senator Lankford. OK. I have exceeded my time. I yield 
back.
    Chairman Johnson. Senator Peters.

              OPENING STATEMENT OF SENATOR PETERS

    Senator Peters. Thank you, Mr. Chairman.
    Thank you for your testimony, and after listening to Ms. 
Rivers, we have raised a lot of interesting issues here today.
    As I mentioned to Ms. Rivers after she testified, this is 
not an unusual situation that I have run against given the fact 
that we had a marine veteran in Michigan just recently that was 
highlighted in the media for his trials and tribulations 
related to the fact that he was improperly listed as being 
deceased a couple times, to the point of losing his Veterans 
Affairs benefits; the Treasury Department shut down his bank 
account; his credit score was ruined as well when he was trying 
to purchase a house, and it took him several months to get 
through that process. And so this is an anguishing issue for 
many folks, and you mentioned, Mr. Brune, that about 9,000 
individuals you believe each year are in this situation?
    Mr. Brune. Correct, Senator.
    Senator Peters. So my question is: How do they get on that 
list? Of those 9,000, what is usually the event that is 
triggering them getting on that list?
    Mr. Brune. There are two primary events. One would be data 
entry error and the second would be erroneous information by 
the reporter, whoever that reporter might be.
    Senator Peters. The reporter?
    Mr. Brune. Correct, the individual who reports death. So we 
get reports from family members, from doctors, as I mentioned, 
also returned mail marked ``Deceased'' from the Postal Service. 
We get reports from the Treasury and CMS as well.
    Senator Peters. So a report from the Postal Service. You 
are not getting a death certificate. You are having the Postal 
Service saying, someone did not get their mail?
    Mr. Brune. Correct. Returned mail marked as ``Deceased'' is 
an unverified report and would need to verify that before we 
took any action.
    Senator Peters. So you would not just say, a person is not 
collecting their mail, let us put them on the death list?
    Mr. Brune. Correct. We would possibly suspend benefits, but 
we would not terminate the benefit.
    Senator Peters. How long does it take to fix these, 
normally? Do you have any kind of analysis of those 9,000 
individuals?
    Mr. Brune. Well, the process is for an individual who is on 
the death master file incorrectly to visit one of our offices, 
provide evidence of their identity. We can do that through a 
scheduled appointment so the individual does not have to wait. 
And usually it takes an hour or two to complete.
    Senator Peters. But the problem is that even if that is 
done, then the information is not Proactively communicated to 
the commercial vendors, banks, others that may want this 
information, which I think Ms. Rivers was in that trouble. Is 
there a way to do that proactively? Because otherwise, we are 
just relying on the service to go back and constantly check the 
list, and oftentimes, an individual does not know they are on 
this list as well.
    They just are having a situation like Ms. Rivers has, that 
things are not going well, and even though there is seemingly 
no explanation for it, and yet there is no proactive measures 
on the part of the Social Security Administration to say, we 
made a mistake. We have to try to fix it for this individual 
because we know this individual is going to be going through an 
awful lot of heartache.
    Mr. Brune. Correct. The measure we take, Senator, is to 
share the updated file the following week with the Department 
of Commerce. So the mistake is corrected the subsequent week. 
The record would be identified as being deleted from the death 
master file that is shared with the Department of Commerce.
    You asked specifically about the commercial entities. There 
may be value in sharing the full death file, as the Ranking 
Member and the Chairman have proposed in their legislation with 
a do-not-pay portal and if commercial entities could use that 
portal, they would have access to the information.
    Senator Peters. Now, going to the, which I think is the 
other fascinating part of this hearing, are the 6.5 million 
people at 112 years old. Mr. O'Carroll, now, in your testimony, 
you said these folks are not receiving Social Security 
payments; they just simply still have a valid Social Security 
number out there, and that there is no data in terms of date of 
death.
    At some point, these individuals probably received Social 
Security checks and then they stopped getting Social Security. 
Why does not that trigger something? If not picking up your 
mail is enough to get you on the list, what stopped them, once 
they stopped receiving a Social Security check, we can probably 
assume they are no longer alive.
    Mr. O'Carroll. Well, the interesting part, Senator Peters, 
is that many of these are from the 1970s when people were 
coming into SSA offices and saying a person had died who was 
not getting benefits at the time, a family member, a widow, 
children, or dependents like that, that is where a lot of these 
records were created.
    So the person did not have the benefit from SSA, was not of 
record with SSA, and that is pretty much the crux the problem. 
They are old records with little ways for SSA to catch it.
    Senator Peters. Because they never were receiving a check--
--
    Mr. O'Carroll. Correct.
    Senator Peters [continuing]. To begin with. So is that why 
it is the 112-year figure? What is the situation of 100-year-
old individuals and 105-year-old individuals and 110? Is there 
something about 112?
    Mr. O'Carroll. What happened was is that we had gotten word 
from a financial institution that the two accounts were set up, 
which is in my testimony. But anyway, at that point, our 
auditors looked and they figured out what was the highest age 
of record, and that is where we came up with 112. And as I 
said, there are about 35 people in the world that are 112.
    Senator Peters. But do you see these same kind of numbers 
of someone who is 105 years old, a large number?
    Mr. O'Carroll. Well, what is interesting on that one is, is 
that what SSA had been doing and we do is that when a person 
reached 100 years of age, they would reach out to try to verify 
that the person was there. That was called the Centenarian 
Project. We were getting fairly good information on that. We 
were saving about $8 million a year by doing that.
    I mentioned in my testimony--it would make more sense to 
start taking a look at people who are not using Medicare for 
long periods of time in that age group. So then we had two 
criteria, the age and the fact that they were not seeing a 
doctor. And in that group there, we are seeing about four or 
five times better results than we were getting by just using 
the age limit.
    But yes, everybody is aware of that and we keep taking a 
look. We have had different projects that we have worked with 
SSA looking at, as an example, 90-year-olds.
    Senator Peters. And where are we on the Medicare project? 
How many of those records are--and what is the cutoff for 
Medicare? How long without benefits of Medicare?
    Mr. O'Carroll. We have been using 3 years on that one. That 
seems fairly good. In fact, what we are looking at right now, 
because it has been so successful, we are doing an audit, 
taking a look at Medicaid and see if we can also identify 
additional deceased people that way.
    Senator Peters. Thank you so much.
    Senator Johnson. Senator McCaskill.

             OPENING STATEMENT OF SENATOR MCCASKILL

    Senator McCaskill. Thank you. Last year during a hearing on 
this subject, I learned that we were selling these lists to 
other government agencies, which is hard for me to wrap my arms 
around that policy, and I think we were told by Ms. LaCanfora 
that this was required by law. Is that correct?
    Mr. Brune. That is correct, Senator. We are required to 
seek reimbursement for our costs.
    Senator McCaskill. So let us assume that we could do 
something legislatively. Would you see any reason why we could 
not put a secure website up with this information that was 
properly encrypted and properly pass-coded that would share 
this information? I mean, we have hundreds of millions of 
dollars going out the door at other agencies and they are 
trying to budget paying you for information.
    I mean, all of this is being gathered in the public domain. 
It seems bizarre to me that we are not focusing on a priority 
of a policy that would make this information available to 
others easily and at as little expense as possible since the 
taxpayers are paying the bill no matter where this is 
occurring.
    Mr. Brune. Yes. We would agree and in our testimony, we 
supported the goal of the Ranking Member's bill, also in the 
President's Fiscal Year 2016 budget to make the full death file 
available to the Do Not Pay Portal, which provides that a 
complete set of records, over 100 million records, to all 
Federal agencies for all Federal payments.
    Senator McCaskill. Well, it would be great if we could get 
that done. OK. Now, here is the other thing that really gets 
me. If you get data in, you are putting it in the system and 
selling it without verifying it if there is not an SSA 
recipient, correct?
    Mr. Brune. That is correct. We do not verify records for 
non-beneficiaries. but we do not sell the information, we are 
merely reimbursed for the cost of preparing the file.
    Senator McCaskill. So you get a record and you put it in 
the system for another agency to buy, but because it is not an 
SSA recipient, you are not going to the trouble of verifying?
    Mr. Brune. We have no program purpose to do so.
    Senator McCaskill. So is it clearly delineated to them what 
records are verified and what are not?
    Mr. Brune. It is marked in our Numident as unverified 
report.
    Senator McCaskill. Now, are they, to your knowledge, maybe 
the IG would know or maybe GAO would know, are these other 
agencies then going and verifying? Mr. Bertoni.
    Mr. Bertoni. No, I do not think there is any additional 
verification. The agencies pay for a dataset. It might be an 
annual set plus monthly updates or weekly updates. They are 
getting information that they believe to be true and correct 
and there is no additional verification.
    Mr. Brune. Senator, I would add that in our distribution of 
the file--in my statement, I clearly articulated the intent of 
the file is for Social Security purposes. We know that because 
it is aggregated across jurisdictions and it is comprehensive 
for the most part, that it is of value to others. But we tell 
folks right up front, it does not include every record, that we 
cannot confirm the veracity of the file, and that they should, 
in fact, verify it if they are going to use it for a business 
purpose.
    Senator McCaskill. Well, what if they wanted to pay you to 
verify it? Could you not verify them all and then just charge 
them for it? You are already charging them for it.
    Mr. Brune. Under current law, we believe we are verifying 
all the records that we should be verifying for our program 
purpose, for those that do not----
    Senator McCaskill. So the law would have to be changed in 
order for you to verify everything?
    Mr. Brune. Correct.
    Senator McCaskill. No? Daniel says no.
    Mr. Bertoni. I do not believe so. They have a pecking order 
in terms of what the agency believes to be the most accurate 
reports. Reports from States are deemed the most accurate. They 
are pre-verified and those are deemed not to be--they have to 
have a verification. There are also reports from family members 
and funeral directors that are believed to be highly accurate, 
that I believe the agency has decided, per policy, not to 
verify. I do not think that is in the law.
    Mr. Brune. That is agency policy, correct.
    Senator McCaskill. OK.
    Mr. Bertoni. Just one example.
    Senator McCaskill. Have you figured out what it would cost 
you to verify them and then recover those costs when you sell 
them?
    Mr. Brune. I would have to get back to you for the record 
on that cost.\1\
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    \1\ The information submitted by Mr. Brune appears in the Appendix 
on page 101.
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    Senator McCaskill. Would that not make sense if you are in 
the business of verifying? So it seems like to me you guys are 
doing this verification and you know what it costs you because 
you are charging people for it, but you are not doing it--if 
there is not an SSA recipient and then that agency is getting 
it, which heightens the likelihood of an improper payment.
    Mr. Brune. Senator, this boils down to a fiscal law 
question. Essentially, the agency is not permitted to spend 
trust fund dollars or a limited administrative expense account 
on items that do not have a program purpose. And that is the 
basis on which we do not verify non-beneficiary reports.
    Senator McCaskill. I completely get that, but you 
understand the common sense argument. Tell me you do.
    Mr. Brune. I do.
    Senator McCaskill. OK. Good.
    Mr. Brune. We will get back to you on the costs.
    Senator McCaskill. OK. I just got worried for a minute. 
Senator Ayotte and I have a bill, Senator Coburn and I had a 
bill. This is an agency, we call it, let me Google that for 
you, because this is an agency that the vast majority of the 
information that they are supposed to be distributing is easily 
available online, and they are the distribution source for your 
public death master file.
    Have you all given some thought, if we get rid of the 
National Technical Information Service (NTIS), which we should 
because it is a waste of money, what your alternative 
distribution method would be?
    Mr. Brune. We have not considered an alternative 
distribution method because at present, NTIS does serve as that 
data clearinghouse for the Federal Government.
    Senator McCaskill. And the money goes into a revolving fund 
which keeps them in existence, which we get back to the 
beginning which is, this is agency which has outgrown its 
usefulness and purpose, and for some reason, we have a really 
hard time shutting down agencies like that. So I am determined, 
and I think most of my colleagues on this Committee share my 
determination about this agency.
    So I would think you should begin pricing out what NTIS is 
making off selling your lists. Maybe you could use that money 
to verify for the other agencies.
    Mr. Brune. Understood.
    Senator McCaskill. Thank you.
    Senator Johnson. We will be supportive of that effort. 
Senator Ayotte.

              OPENING STATEMENT OF SENATOR AYOTTE

    Senator Ayotte. Yes. Let me just say that I completely, 
wholeheartedly agree with my colleague, Senator McCaskill, on 
this. So I wanted to ask, just to understand this information 
sharing piece, in order for you to share information, it sounds 
to me, because of the limitations that are put on what you can 
do with regard to the trust fund, that we are going to need 
some legislative action there to have a broader information 
sharing across agencies, correct?
    Mr. Brune. Senator, the response I have provided to Senator 
McCaskill was relative to verifying records for which we did 
not have a program purpose. But we would need additional 
authority to do non-mission work, yes.
    Senator Ayotte. But as I also understand it, that we are 
also, as we look at this challenge that we are facing in terms 
of the DMF list, this issue, we are also not sharing among 
States, right? So do States share with us? I know they are 
sharing with us in terms of vital records, we have heard, but 
do we share with States what we know?
    Mr. Brune. We do. We share all our death information with 
those State agencies that have a responsibility for 
administering federally funded benefits.
    Senator Ayotte. Of any kind?
    Mr. Brune. Yes.
    Senator Ayotte. OK. And so, one of the things that just 
seems, as I look at this whole thing, as we look, we are not 
communicating amongst each other, and then there is also the 
amount of money that is at stake here. A lot of us talk about 
wanting to address sequester. We could do it if we got improper 
payments to a much more reduced level.
    These resources that we are talking about, whether it is to 
defend the Nation or NIH or all the things that we would like 
to do, I mean, this is very big money. And so, I am looking at 
this thinking, How do we also not only share information with 
each other, what steps do we need to take to verify it further? 
And then there is a lot of publicly available information, it 
seems like, we are leaving on the table to help verify for us.
    I mean, I would love to get certainly Mr. O'Carroll and Ms. 
Davis's impression. Is there not some publicly available 
information that we are not necessarily cross-checking with?
    Mr. O'Carroll. That is correct, Senator. What we did was an 
audit a few years ago and in the audit, we went to SSA and we 
looked at a sample of 58 records that were suspended showing 
that no payment was going out for some reason of caution. And 
then we went through the 58 and we found that 57 were deceased. 
And the way we found it was, it was probably in about thirds. 
For one-third of them, SSA had been able to find out about, had 
the information in their records, and it was just a question of 
cleaning it up.
    And then for another one-third, we were able to get death 
certificates from the States and other ways like that. And then 
for the other third, we used other databases that were 
available just to identify the person as deceased and be able 
to get the information that way. So yes, I find third-party 
databases are very useful.
    Senator Ayotte. So do we need legislative proposals--in 
order to incorporate information that is already available and 
third-party information, and also when I heard Mr. O'Carroll's 
example, I also think that apparently the States, what they are 
doing, is submitting the vital statistics to the Social 
Security Administration. Apparently it does not have the same 
level of accuracy as it should, too.
    So do you need legislative proposals to be able to consult 
third-party information or is it a resource issue or is it all 
of the above? And also, what is it that we need to do from the 
States' perspective? If we knew that you could get the death 
certificate for certain individuals, apparently their vital 
records office would have not submitted that if it did not get 
into your system properly.
    Mr. Brune. Senator, two points. The dataset that Mr. 
O'Carroll just mentioned, the 58 number holders in suspense, 
those recommendations were just sent to the agency last Friday. 
We believe that there are policy adjustments we can make to 
look at third-party datasets, and we agreed with that 
recommendation. We will be pursuing it.
    The agency's position is that full funding of electronic 
death registration would go a long way to ensuring the 
integrity of these files. Many of the files that you mentioned 
are in jurisdictions where our experience is they are not using 
electronic death registration. Their paper processes are out of 
date.
    Funding these jurisdictions to move to Electronic Death 
Registration would make the information more accurate because 
electronic death registration verifies against Social Security 
before the death certificate is issued, before a report of 
death is made. And so, that would be the approach, I think. 
That appropriation falls under the Health and Human Services 
Department.
    Senator Ayotte. Why is it that this has not been a bigger 
priority of the Federal Government? I mean, this is a lot of 
money that we are leaving on the table that is fraudulently 
going out the door that could be used for real things that we 
need to do? As I look at the big picture here, why have we not 
made it a bigger priority?
    I guess I would direct it to the Inspector General, Mr. 
O'Carroll, and from your work that you have done, I would like 
to hear your impressive GAO, Ms. Davis. Why is this not a 
bigger priority? You have been working on these issues for 
years and you have been coming to Congress and this is a huge 
issue.
    Mr. O'Carroll. Agreed, Senator. We are in a unique position 
as the SSA OIG because we represent the Council of the 
Inspectors General as liaison with OMB on this thing. I have to 
say, there has been a lot more emphasis on identifying improper 
payments, curbing improper payments, and probably the biggest 
improvement is the Do Not Pay list, which is making all the 
government agencies compare this information so that, as an 
example, OPM will not be sending out a pension check to 
somebody that another agency thinks is deceased.
    And I guess the only other issue that I asked for some help 
on, and I mentioned this before in another hearing, is that 
data matching between agencies is handicapped in so many 
different ways, where one agency is not allowed to provide its 
data because of the Computer Matching Act.
    And that is probably the biggest issue now, where one 
person is receiving a benefit from one agency and then should 
not be receiving a benefit from another agency. We cannot do 
that kind of audit work.
    I cannot match our data with, let us say, for example, 
Department of Labor to find the people that are on worker's 
compensation and are also getting disability benefits from SSA. 
Or when they are disqualified for worker's compensation letting 
SSA know that they have improved. So that type of data 
matching, I think, would be extremely useful in trying to 
prevent improper payments.
    Senator Ayotte. My time is up, but just so I understand, is 
that just a law change or it is a system like a computer system 
change, meaning from the hardware, the fact that we have 
agencies not communicating with each other?
    Mr. O'Carroll. It is a law change and there is a bill out 
there now that has included it.
    Senator Ayotte. All right.
    Senator Johnson. Senator Ernst, if you are ready.
    Senator Ernst. Yes, thank you.
    Senator Johnson. Just in the nick of time.

               OPENING STATEMENT OF SENATOR ERNST

    Senator Ernst. Thank you, Senator Johnson. I appreciate it 
and thank you, everyone, for your testimony today. I do 
appreciate it. Bottom line, up front, this is a situation we 
have to fix. I do not think anybody disagrees with that.
    So what I would like to ask, Inspector General O'Carroll, 
if you would please--what I will do, I will read this quote 
that came from the management at SSA, and this was in response 
to the IG's findings and recommendations. The recommendations 
would create a significant manual and labor intensive workload 
and provide no benefit to the administration of our programs.
    I think we have talked about this. I heard some mention of 
this. But do you feel an accurate and reliable death master 
file is the responsibility of the SSA?
    Mr. O'Carroll. The easy answer on that is yes, that I think 
that any data that SSA is providing to the government, to the 
public has to be accurate. That was pretty much the reason why 
we identified the 6.5 million. When you are doing audits and 
things like that, you are looking for large outliers and that 
is what this group was, a large outlier.
    So yes on that. I understand if you ask Sean, what he is 
going to say is that none of them are getting benefits from SSA 
and that SSA's primary responsibility is the benefit.
    But my point is that, and I think a good reason for this 
hearing, is that if there is the attention put on it by 
Congress, that SSA needs resources or whatever it needs to fix 
it, that is very important because as I said before, so many 
other different benefits in the States, in the government, plus 
voter registration and driver's licenses, everything else, all 
depend on the Death Master File and this is the only thing that 
is out there to prevent fraud.
    Senator Ernst. Yes, thank you. I would agree and I think 
this is a good start and yes, it is an easy answer to say yes. 
But we do know now we need to move forward and correct the 
deficiencies that are out there. There are so many improper 
payments that are going out, not to mention some of the issues 
that have been brought up with those not receiving payments, 
but we also have fraudulent voter registrations, we have 
illegal use of numbers for employment or for government 
assistance, so many other issues that come with this.
    I do believe that you have delivered around 70 
recommendations to the Social Security Administration over the 
past number of years. Can you please tell us, how many of those 
have been implemented over the years?
    Mr. O'Carroll. Yes. Of the 70 that we have recommended--
well, first, there are two steps to that. The first step is an 
agreement, and we are getting about 93-percent agreement from 
SSA. But out of that 70, probably about 50 have been enacted.
    In fairness, some of them, as Sean just mentioned, were in 
the last 6 months. We have issued maybe four or five audits 
with a lot of different recommendations that they have not 
really had time enough to implement. But as an example we watch 
that very closely. We go back every few years and take a look 
to see if they agreed with something, whether or not it was 
implemented, and if it was not, we bring it to their attention.
    Senator Ernst. And then with these recommendations and any 
others that are coming out, can any of you please to the panel, 
really give an overall cost estimate, man hours, additional 
time, any of those parameters that might be necessary to make 
sure that corrections were implemented?
    Mr. Brune. Senator, the recommendations that Mr. O'Carroll 
just mentioned that we agree with, we are committed to making 
those changes within our appropriation. I did want to highlight 
that several of the Inspector General's recommendations have, 
in fact, improved our process. We find high value in following 
the advice that the Inspector General has given us.
    I did want to close by underscoring the fact, as we stated 
earlier in Mr. O'Carroll's testimony as well as mine, the 6.5 
million old records that Mr. O'Carroll looked at identified 
zero improper payments. In totality, death information for 
Social Security's purposes is very accurate. Less than one 
percent of our benefit over-payments are resulting from death.
    Our processes have improved tremendously over the years. In 
the last decade, our processes have grown substantially more 
robust. We are getting more accurate information more timely 
and we are able to intercept over 50 million benefit dollars 
from becoming over-payments before they even get issued. So $50 
million a month does not go out the door because of the 
accuracy and timeliness of the death reports we receive.
    Senator Ernst. And that is a good thing. However, you 
cannot dispute that there are still 6.5 million numbers that 
exist out there, and even though they may not be drawing 
benefits on those numbers, it is still an issue whether it is 
voter registration or some other fraudulent use of a number. So 
that is a concern.
    Mr. Brune. Correct. And I was just talking to Mr. O'Carroll 
before the hearing. We have committed, in our audit response, 
to look at those records before the end of the fiscal year--to 
do a full analysis of what can be used from those records to 
add dates of death or a death indicator to our database.
    Senator Ernst. Very good. Mr. Brune, if you were a lawmaker 
for a day, what would your recommendation be? Just bottom line, 
very easy. What would your recommendation be to this Congress?
    Mr. Brune. Fund all States to use electronic death 
reporting. The adoption rate has been steady since 2002 when we 
started. We only have 37 States and two jurisdictions. We need 
all States, all jurisdictions in every State using electronic 
death reporting. It is the most effective, accurate report we 
receive.
    Senator Ernst. OK. I do appreciate that. Thank you so much 
for your testimony today. Thank you, Mr. Chairman.
    Senator Carper [presiding]. You are welcome. Thank you. 
Would you say that again? [Laughter.]
    Senator Ernst. Thank you, Mr. Chairman.
    Senator Carper. I told the staff, please do not tell him I 
did this. I caught myself. I want to go back, if I could, the 
question I am going to ask, similar to what Senator Ernst just 
asked, and that I started asking earlier Mr. Bertoni. If there 
is one thing, only one thing we were to do, what would it be? 
You are the only one I got to pick on. Senator Ernst just said 
it, came back and sort of followed up on that, which is good, 
but I am going to ask it before we finish this one thing.
    I want to come back to the portion of your testimony, Mr. 
Mader, where you went through a series of items, series of 
ideas, I think, are contained in the President's 2016 budget. 
And a number of them involved program integrity. Some of them 
involved funding, providing resources for the IRS. Would you 
just step through those for us again? And I am going to ask our 
other panelists to respond briefly to those, which ones they 
think make sense.
    Mr. Mader. I think, Senator, we touched on EITC. There are 
a series of program integrity initiatives across HHS and, in 
fact, in the current budget in 2015, actually, we were 
fortunate to receive funding for one of those. There are 
program integrity initiatives across DOL and I think they have 
demonstrated, in a pilot program with the States--because 
recognizing that unemployment insurance is a block grant to the 
State--but they have demonstrated using New York State as the 
key to doing some very creative analytics, and again in 2016, 
we have asked for continued funding of those initiatives.
    So I think across in my testimony, there are about half a 
dozen that we mentioned, and that actually was probably the top 
six. We could provide a few more for the record. But those are, 
I think, going back to the Senator's comment, I think that if 
there was one thing I could ask for, maybe two, is get to 
Treasury the full death master file because that is the place 
that we are running all of the civilian payments past, and 
having the most accurate set of data would be a real benefit. 
So that is the one ask.
    The other ask is--and I strongly believe that in order to 
save money, we need to make an investment, and a 16 investment 
in those half a dozen or so program integrities, I believe, and 
I think the Administration strongly believes, that we will see 
benefits in driving not only the rate, but the total amount of 
improper payments down if we are allowed to make those kinds of 
enhancements.
    Senator Carper. OK. Thank you. Mr. Brune, Mr. O'Carroll, 
any comments on what we just heard from David, especially with 
that first request?
    Mr. Brune. Senator Carper, I believe that funding EDR would 
be the first best step as all that data, hopefully, eventually, 
pending your bill, goes into Do Not Pay. We want to make sure 
it is as accurate as possible on the Social Security 
Administration's end. We are going to certainly take a look at 
those very old records, see how we can make sure they are as 
accurate as possible. But prospectively, getting all 
jurisdictions to use electronic death registration would be the 
way to go.
    Senator Carper. In terms of the timing, I seem to recall 5 
months. I might be confusing the testimony I have heard. There 
is a delay, we need 5 months until late October. Can someone 
help me with this? Am I imagining this?
    Mr. O'Carroll. The delay on the release you are talking 
about, Senator?
    Senator Carper. I think so.
    Mr. O'Carroll. Yes. One of the bills that came out of 
Committee is that it will be 3 years before death data goes 
public. And we applaud it because it was based on one of our 
audit findings, that if you give extra time to a person who has 
been reported dead, they can come into SSA and get it fixed 
before it goes out into the public. And I have to say, that is 
probably the best thing that has happened with death reporting.
    Senator Carper. OK. Anybody else want to give us a killer 
idea, maybe something that has already been mentioned once or 
twice, maybe not?
    Mr. Bertoni. I think the Improper Payments Information Act, 
the fact that we have Do Not Pay establishes metrics that holds 
agencies accountable. I think when you are measuring that, it 
is going to hold agencies accountable to make it a priority. I 
also think the electronic verification at the State level, I 
think it is proven that those death reports are highly 
accurate, and moving in that direction, I would agree with Mr. 
Brune that that is prudent.
    And I think it would allow them, SSA, to really look at 
their other verification processes and perhaps move some 
resources over to those other areas. And I go again to 
verification of reports from family members and funeral homes. 
We looked at some data of 82 corrections in 2012 and 2013, and 
we pulled a small case sample of 46 cases. In 35 percent of 
those cases, those folks were, in fact, alive, but they were 
erroneously----
    Senator Carper. What percent?
    Mr. Bertoni. 35 percent of the 45 cases that we looked at, 
they were erroneously placed in the file. And, if when you look 
at the source of those reports, it was family members and 
funeral directors. Those are typically regarded as being highly 
accurate and not subject to verification. So if you free up 
resources, that they do not have to, focus on the States who 
are verifying electronically, perhaps you can look at some of 
these other policies and do maybe do some additional 
verifications.
    Senator Carper. Ms. Davis, I have not picked on you very 
much. How about sharing something with us?
    Ms. Davis. Well, if I could look at a bit higher level, at 
the overall improper payments estimate this past year, which 
was almost $125 billion, there were actually three drivers of 
the increase of $19 billion and those three drivers were 
Medicare, Fee-for-Service, Medicaid, and the Earned Income Tax 
Credit program.
    When you look at those increases individually, Medicare, 
Fee-for-Service was almost $10 billion, Medicaid a little over 
$3 billion, and then the Earned Income Tax Credit program was a 
little over $3 billion as well. You look at those and you have 
65 percent of your entire estimate of improper payments.
    What is of concern is that these programs, in particular 
the health care programs, are growing. For example, HHS has 
estimated or predicted that over the next 3 years, that the 
Medicare and the Medicaid programs are going to expand program 
outlays by about 8 percent annually over the next 3 years.
    So if you take that and you compare it or analyze it 
against the rate increases, there are some concerns, definite 
concerns. Again, to be a little bit more specific, the rate for 
the Fee-for-Service program was 10.1 percent last year. It is 
now 12.7 percent. The Medicaid also went up almost a whole 
percentage point.
    The Earned Income Tax Credit, over the past 5 years, has 
been running about 25 percent. Last year it was a little over 
24 and now it is over 27. So if you look at these programs and 
the facts that the rates, error rates in these programs are 
increasing, and the compound that with a possibility that 
program outlays are going to increase, it is going to be 
difficult to get a handle on these overall governmentwide 
improper payments.
    Senator Carper. Great. Thanks so much, Mr. Chairman.
    Chairman Johnson [presiding]. Thanks for holding down the 
fort here. Not only is our Ranking Member highly interested in 
this issue, but he is also a pretty good sprinter. I saw him in 
the hallway. I have only got a couple questions left. I really 
want to kind of explore the EDRs and the differences between 
the States and the data that comes from those.
    I do not know who is the best person to talk to about that. 
Is that you, Mr. O'Carroll?
    Mr. O'Carroll. I will let Sean do the first one.
    Chairman Johnson. Do you have a stats in terms of the 
accuracy of the information coming from States with EDR versus 
those that do not have EDR?
    Mr. Brune. Yes, we do, and there are really two dimensions, 
both of which I think are important to us and of value in the 
conversation about improper payments. One dimension is 
timeliness of reporting, and within the EDR arena, we average a 
report within 5 days of the date of death and within 24 hours 
of when the State becomes aware of it. That is very timely.
    Chairman Johnson. Again, those are in the exact form that 
you want it in, correct?
    Mr. Brune. Correct.
    Chairman Johnson. It totally matches your database?
    Mr. Brune. Correct. And then for the record,\1\ I could 
provide you what amount of those inquiries do not match when 
they send us a name and SSN combination, what does not match 
before they report. Now, I want to make sure that I mention 
that process is that the first step before anything is sent to 
us is the name and SSN match. If that occurs, then we will get 
the rest of the information. And if it does not occur, it goes 
back to the reporter in order to double check and make sure 
they have the correct information, that they did not mis-key 
something.
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    \1\ The information submitted by Mr. Brune appears in the Appendix 
on page 102.
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    Chairman Johnson. So again, from the States that do not 
have EDR, are you also getting those from their offices of 
vital statistics or is that where you are getting things from 
financial institutions, Postal, I mean, all the others?
    Mr. Brune. All of the others. And we could get multiple 
reports, Senator, even in an EDR State, and it is important to 
recognize that in those States that have adopted electronic 
registration, every jurisdiction within the State does not use 
it equally. And so, some jurisdictions, counties, or 
municipalities may be at 100 percent utilization, others might 
have a very low rate or not use it at all. And so, there is 
much more work to be done.
    And part of that, I think, is the reflection of the fact 
that at the local level, these records were maintained in 
different formats and the quality of that data varies.
    Chairman Johnson. So you do not have the localities within 
a State submitting the information to some kind of central data 
center and then have those electronic records forwarded to 
Social Security? You are getting these from multiple sources 
within a State?
    Mr. Brune. It is up to the State how they send us the 
information. Usually it does come from a State bureau of vital 
statistics, but how those entities are organized at the State 
level varies.
    Chairman Johnson. But again, so the 37 States you get that 
from, they come from a centralized vital statistics office 
within the State? They may be getting the information from 
multiple sources, but they accumulate it and there is just one 
contact for Social Security within those 37 States?
    Mr. Brune. That is generally true, but it can vary 
depending on the State.
    Chairman Johnson. So what has been the hang-up in the 13 
other States? I mean, just resistance? Is it funding? I mean, 
the other 37 States, do they fund their electronic death 
records or registries themselves?
    Mr. Brune. I would say that funding is definitely part of 
the equation and I think that some States recognize that they 
have more work to do, that the State of their records would 
require a lot of effort in order for them to get the records to 
a point where they could send it to us reliably in the 
electronic format that we request.
    Chairman Johnson. OK. I am all for States' rights, but this 
might be something that we maybe need to work on. Ms. Davis, I 
did want to talk about exactly how we calculate total number of 
improper payments and also verify. My staff is telling me it is 
about 90 percent of those improper payments really are over-
payments, correct? Or is it about that? What is your 
information in terms of over-payments versus under-payments, 
because we talk about improper. What is the mix?
    Ms. Davis. We have not done recent work to determine the 
actual mix. I will say, though, that the majority are over-
payments, and there are a number of items, of course, that are 
classified as improper payments because there is insufficient 
documentation.
    Chairman Johnson. The calculation of the 1-point or $124.7 
billion, that is all through statistical sampling, correct?
    Ms. Davis. Correct, statistical. I mean, let me qualify 
that statement. It is statistically valid sampling 
methodologies, but OMB, the OMB Director can approve an 
alternate methodology.
    Chairman Johnson. OK. Well, those are my final questions. I 
guess I would like to just go over the panel if there is a 
particular point you want to make, one point relatively brief, 
to close out the hearing. I will start with you, Mr. Bertoni.
    Mr. Bertoni. I would say to the extent that the DMF and the 
Do Not Pay initiative, at some point, will be made to the full 
file. I think you are running out of time. Every day as more 
States come onto the electronic system, there are going to be 
fewer and fewer records in there and that file is going to 
become less useful and potentially less accurate.
    So if that is going to happen, it should be concurrent or 
in tandem with increasing the accuracy of death data in 
general.
    Chairman Johnson. Thank you. Mr. Brune.
    Mr. Brune. Senator, we are fully committed to maintaining 
as accurate death data as we can. We are dependent upon the 
States to report that information. We think fully funding the 
electronic death registration is the first step to that. We 
also support aim of the Ranking Member's bill to make all our 
death information available through the Do Not Pay portal, and 
would be happy to provide technical assistance on that bill.
    Chairman Johnson. OK. Appreciate that. Mr. O'Carroll.
    Mr. O'Carroll. Chairman, once again, my biggest one is that 
we asked for an exemption to the Computer Matching and Privacy 
Protection Act for IGs. But by the same token, it should go to 
the IGs and the parent agency. So as an example, when we do an 
audit and we can find that there is an issue of one agency 
making payments when another agency is not making payments, we 
can then have the parent agencies make those matches.
    Chairman Johnson. OK. Thank you. Mr. Mader.
    Mr. Mader. I think supporting the various program integrity 
initiatives in the President's budget.
    Chairman Johnson. Thank you. Ms. Davis. By the way, I 
really appreciate these brief statements. Ms. Davis.
    Ms. Davis. The improper payments legislation requires 
Inspector Generals to perform annual reviews of compliance with 
the criterion on IPERA and there are a number of issues that 
they have identified over the last several years. Implementing 
the recommendations that are made by these Inspectors General 
would go far in helping to reduce improper payments.
    Chairman Johnson. OK. Well, again, I just want to thank all 
the witnesses for your thoughtful testimony, your thoughtful 
answers to our questions. Ms. Rivers, thank you for sharing 
your story, and again, this Committee is dedicated to making 
sure this is not just a hearing, but something comes out of 
this. So we want to work very closely with all the agencies so 
we can, again, prevent the type of situation that Ms. Rivers 
has had to deal with.
    The hearing record will remain open for 15 days, until 
March 31t, at 5 p.m. for the submission of statements and 
questions for the record. This hearing is adjourned.
    [Whereupon, at 6:08 p.m., the hearing was adjourned.]

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